The Senior Citizen Savings Scheme (SCSS) is a secure and stable income option for those who need regular income support after leaving their job. This scheme is administered by the Government of India, so both the invested capital and the interest earned are considered completely safe. Interest is deposited directly into the savings account every three months, making it easier to meet expenses like medicines, food, electricity, insurance premiums, or other household needs. Currently, this scheme offers an annual interest rate of 8.2 per cent.
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Who can open an SCSS account?
The eligibility criteria for this scheme are quite clear. Indian citizens aged 60 years or older can open an account under this scheme. Additionally, those between 55 and 60 years of age and who have taken voluntary retirement or superannuation are also eligible to invest, subject to certain conditions. An account can be opened by an individual alone or jointly with their spouse. Accounts can be opened easily at a post office or any authorised bank branch in the country.
Minimum and Maximum Investment Limits
The minimum investment amount in SCSS is ₹1,000, while the maximum limit for all accounts combined is ₹30 lakh. This limit is important because senior citizens want to keep a large portion of their retirement savings in a safe place, and this scheme provides that assurance. The government reviews the interest rate every quarter, so the scheme’s returns may fluctuate slightly from time to time.
What will be the quarterly income on an investment of ₹30 lakh?
If an investor deposits the maximum limit, i.e. ₹30 lakh, then at the current interest rate of 8.2 per cent, they earn approximately ₹246,000 in interest annually. This amount is directly credited to their bank account in the form of approximately ₹61,500 every three months. This regular income is very helpful for retired individuals and makes managing monthly expenses easier.
What is received on maturity?
The original term of this scheme is 5 years, after which the account holder can extend it for three-year periods. At maturity, the investor’s principal amount is returned. Since interest is already credited to the bank account every quarter, no additional amount is paid on maturity. This arrangement is beneficial for those who want regular cash flow during their retirement years.
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Premature Withdrawal Facility
Although SCSS is a long-term investment option, if an investor needs to withdraw funds before maturity for any reason, they can do so. However, certain rules apply. Closing the account within the first year is not permitted. Closing the account between one and two years incurs a penalty of 1.5 per cent of the deposit amount. This deduction is reduced to just 1 per cent for closing the account after two years. The purpose of the penalty is to keep investors invested for a long time, but at the same time, they can also get liquidity when needed.
