The Senior Citizen Savings Scheme (SCSS) is a reliable government savings scheme that provides financial support and security to the elderly. This scheme offers an annual interest rate of approximately 8.2%. Obviously, after retirement, senior citizens need funds to meet their financial needs. In such a situation, this scheme is considered the best. It provides guaranteed returns along with government protection.
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How to open an SCSS account
To avail the benefits of this scheme, senior citizens must apply at any nearby post office branch. A prescribed form must be filled out, which can be obtained from the post office or downloaded from the official portal. After filling out the form, applicants must provide their photograph and necessary documents. Deposits are accepted via check or cash. After the process is completed, the account is activated and interest begins to accrue quarterly.
Features of SCSS
Investments in this scheme can be started with a minimum of ₹1,000, and deposits are always made in multiples of ₹1,000. A person can hold a maximum of ₹30 lakh across all their SCSS accounts. Husbands and wives can open separate individual accounts or operate a joint account. This arrangement helps maintain separate sources of income within the family.
Interest Payment and Returns
Currently, SCSS offers an interest rate of 8.2% per annum. Interest is credited to the account every three months. A deposit of ₹30 lakh in this scheme generates a regular income of approximately ₹61,500 every three months and approximately ₹20,500 per month. The total interest earned over five years amounts to approximately ₹12.30 lakh. If the investor does not withdraw the amount after maturity, the total amount reaches approximately ₹42.30 lakh after five years.
Extension and TDS Rules
This scheme is for a period of 5 years, but the account can be extended for a period of 3 years each time. TDS is deducted if the interest exceeds the limit. However, investors can avail an exemption from TDS by submitting Form 15G or 15H.
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SCSS Account Closure Rules
No interest is paid if the account is closed within one year. If the account is closed after one year but before two years, 1.5 per cent of the total deposit amount is deducted. If the account is closed after two years, one per cent of the amount is deducted. If the account is extended and closed in the first year of the extended period, one per cent of the amount is also deducted.