Opportunities in life come only when you’re young… Wrong!
Sometimes great opportunity knocks only when you’re entitled as a ‘Senior’. One such opportunity which you can not afford to lose as a senior is the ‘Senior Citizens Saving Scheme’ by India Post offered exclusively for Seniors giving the highest returns on the investment.
The schemes offered by the India post provides various investment options for everyone based on their taste. It is the highest return and safest form of investment in the whole of the country, backed by the sovereign guarantee of the Indian Government. There are a total of 10 saving schemes provided by the Post Office Scheme.
A comparison between different saving schemes and their Interest Rate and Taxability
| List of Schemes | Interest rate and Return | Taxability |
| Public Provident Fund | 7.1% p.a., compounded annually. | Exempted under Section 80C with a maximum deposit of Rs. 1.5 Lakh per year |
| National Savings Certificate | 6.8% p.a., compounded annually. | Under section 80C, Tax deduction up to Rs. 1.5 Lakh p.a. |
| National Savings Monthly Income Scheme | 6.6% p.a., return payable monthly. | Interest earned is taxable. |
| Sukanya Samriddhi Accounts | 7.6% p.a., compounded annually. | (Only for girls). Earned interest and maturity amount, all are tax-free. |
| Senior Citizen Savings Scheme | 7.4% p.a., compounded annually. | Non-taxable under section 80C up to 1.5 Lakh and maximum TDS rebate of Rs. 50,000 on interest earned. |
| Post Office Savings Account | 4% p.a. | Non-taxable under Rs. 50,000 on interest earned. |
| Post Office Recurring Deposit Account (5 years) | 5.8% p.a., compounded quarterly. | Taxable as per individual’s earnings according to tax slabs. |
| Post Office Time Deposit | 6.9% p.a. for 1, 2 and 3-year time deposits. | Exempted under Section 80C with a maximum deposit of Rs. 1.5 Lakh per year |
| Kisan Vikas Patra | 6.9%, compounded annually. | Taxable on interest earned but tax-free on maturity. |
Senior Citizens Savings Scheme (SCSS) is the best investment option for Indian Senior citizens aged 60 and above. Moreover, it is backed by the government, making it risk-free. The maturity period is just 5 years. The Interest rate is set at 7.4% per annum, compounded annually, making it one of the highest Return On Investment(ROI). Keep reading to know more about SCSS eligibility, limits, maturity details and how to start investing in the scheme.
Eligibility for Senior Citizens Saving Schemes
- The individual must be an official Indian resident individual aged over 60 years and above
- An individual of the age of 55 years or more but less than 60 years who have retired on superannuation can also invest in this scheme subject to the condition that the account is opened within one month of receipt of superannuation benefits and amount less than the amount of retirement benefits
- The Scheme can be availed by retired personnel of Defence Services attaining the age of 50 years subject to the fulfilment of other specified terms and conditions.
- NRIs and Persons of Indian Origin are not entitled to open a Senior Citizen savings scheme account.
- Joint account can be opened only along with spouse and the first depositor in joint account is the investor.
Deposit limits and maturity of Senior Citizens Saving Scheme
The minimum deposit for a Senior citizens saving scheme is Rs. 1000. The deposits greater than Rs. 1000 have to be paid in multiples of 1000 were Rs. 15 lakh is the maximum for a scheme. Amounts less than Rs. 1 lakh can be deposited in cash. If the deposit amount crosses Rs. 1 lakh for Senior Citizens Savings Scheme, Using a DD/Cheque is compulsory.
The maturity period of Senior Citizen Savings Scheme is 5 years, calculated from the date of account opening. There are also premature closure options anytime during the 5 years. No interest will be payable if you close it before 1 year. After 1 year, a penalty of an amount equal to 1.5% of the deposit and after 2 years, 1% of the deposit will be deducted.
Senior Citizens Savings Scheme Calculation Method
Any deposits made into Senior Citizens Saving Scheme are compounded and paid out annually. Let us consider you open an account today depositing Rs. 10 lakh with the current interest rate on SCSS being 7.4% (as of Q3 FY 20-21). The maturity amount at the end of 5 years will be :
- 5 year investment = 15,00,000
- 1 year interest rate =1,11,000
- Maturity amount = 20,55,000
How to Apply for a Senior Citizens Saving Scheme?
Fulfilling all the eligibility criteria, One can apply to Senior citizens saving scheme through the following steps
Step 1 – Visit your nearest post office branch.
Step 2 – Obtain the SCSS account opening form at the post office. Also, You can download the form online from India Post’s official website.
Step 3 – Fill up the form with necessary and correct details and submit it along with your KYC proof and photographs, and other documents if required.
Step 4 – Complete enrolment by depositing the amount as per your convenience.
Step 5 – Voilà! Now you can watch your money grow along with you.
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Senior Citizen Saving Scheme – Benefits
- Safe – SCSS is a government-backed scheme and comes with protection and assurance of the central government. They are risk-free investment schemes to park your funds.
- Max Returns – SCSS has the current highest rate of 7.4% p.a. The Scheme allows seniors to receive substantial returns at maturity.
- Tax Free – The investments in this scheme under section 80C are eligible for tax deductions. If the intrest amount is more than INR 50,000/- the TDS is deducted at source
- Easy withdrawal – Always has an option of premature withdrawal in case of unexpected financial emergencies.
- Easy Availability – With 1.55 lakh post office branches, from rural to urban, SCSS can be availed through any India Post office or designated banks located across the country.
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