SCSS Explained: 8.2% Interest, Tax Savings, And Guaranteed Income For Senior Citizens
Senior citizens often look for safe and steady income options. At a time when fixed deposit rates are fluctuating and many investment options offer lower returns, one scheme stands strong – the Senior Citizen Savings Scheme (SCSS).
SCSS not only provides safety but also offers a regular income to retirees. It gives an impressive 8.2 per cent per annum interest. Senior citizens can also get a tax benefit under Section 80C up to Rs 1.5 lakh.
What is SCSS?
The Senior Citizen Savings Scheme is a government-backed savings plan designed specifically for people aged 60 years and above. The scheme is available at post offices and authorised banks. The interest rate is paid every quarter.
The minimum amount you need to deposit is Rs 1,000, and the maximum is Rs 30 lakh. When the total amount is less than Rs 1 lakh, an individual may deposit the money in cash. When the deposit exceeds Rs 1 lakh, the person should pay using a cheque.
Repayment Tenure
The repayment tenure for SCSS is 5 years. But if you want to close it prematurely, you can do so by filling Form 2. But you cannot withdraw multiple times; only one-time full withdrawal is allowed.
If you want to close the account before 1 year, then you will have to return all the interest you earned. And if you close the account after 1 year but before two years, then a penalty of 1.5 per cent will be imposed on your deposit amount. If you are willing to close the account after 2 years, then a penalty of 1 per cent will be deducted from your deposit.
How to open SCSS account?
Go to any post office or authorised bank branch.
Fill Form A, which is the SCSS account opening form.
Enter personal details such as name, date of birth, address, deposit amount and nominee details.
Submit the required documents such as Aadhaar Card, PAN card, passport, passport size photo and retirement proof.
Deposit the amount in cash if the amount is less than Rs 1 lakh or by cheque or demand draft for above Rs 1 lakh.
Once the verification is done, the account will be opened.
You will get a passbook or account confirmation.
You can also open a joint account with your spouse but the primary account holder must be a senior citizen.
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