Senior Citizen Savings Scheme (SCSS) allows people over 60 to save and invest money. This Senior Citizen Savings Scheme scheme was launched in 2004. The primary goal of this SCSS scheme is to assist senior citizens in acquiring an income after retirement to enable them to enjoy a peaceful retirement. If you are retiring shortly, the SCSS scheme is one of the best retirement investment schemes to help you manage your finances. In this scheme, you are provided with the protection of your capital and other quarterly interest as a source of income.
In addition to being backed by the government, the Senior Citizen Savings Scheme is one of the most reliable sources of income available to seniors for investing money. As well as allowing you to claim income tax exemption, you can also benefit from investing money in the Senior Citizen Savings Scheme retirement scheme.
Below are some key features to consider when choosing Senior Citizen Saving Scheme
- It is necessary to deposit a minimum of 1000 rupees or a multiple of one thousand rupees to open an account.
- The depositor can extend their account for another three years after the maturity period of five years has passed.
- As per the instructions of the Indian government, bank deposits made according to these rules shall pay interest every quarter.
- If the account holder fails to claim the interest accrued every quarter, the interest will not earn any additional interest on the account.
- Deposits in joint accounts shall belong solely to the first holder of the account.
- There is no restriction on the number of spouses who can open an account, and it may be a joint account or a single account with each other.
- Depositors can nominate more than one person as a nominee.
- The Depositors can cancel or change the nomination at any time.
- It is not possible to withdraw considerable amounts from one account at the same time.
Listed below are a few benefits of the Senior Citizen Saving Scheme
Benefits of Income Taxes
An SCSS scheme is a great retirement savings scheme for investing money since it provides a steady source of income, a high-interest rate, and Income Tax Benefits, all of which are worth considering. If an individual opts for the old tax regime, he can claim deductions up to INR 1.5 lakhs on the principal amount under section 80C. It is also important to note that interest received is taxable under the applicable tax slab.
Limitations on the minimum and maximum deposits
In this scheme, one can deposit a minimum amount of INR 1000, while the maximum amount that one can deposit is INR 15,00,000. Additionally, it is essential to note that deposit amounts in the SCSS scheme are only allowed in multiples of INR 1000. You must not exceed one lakh rupees if you want to deposit a cash amount.
Withdrawals and maturity
There is a maturity period of five years for the SCSS scheme, but it can be extended by three more years if necessary. After one year, a member of the SCSS account has the option of withdrawing funds from that account prematurely. It is also required to note that there will be a penalty of 1.5% on the deposit amount if someone wishes to close their account before the end of two years. In addition, if the account holder decides to close the account after two years, a penalty of 1% is applied to the deposit amount to close the account.
SCSS Maturity Period
Senior Citizen Savings Scheme (SCSS Scheme) matures after five years, calculated from the account’s opening date. There is, however, an option for the account holder to extend the account period by a further three years after it has accumulated maturity. The SCSS account is only available for one year after maturity, so the extension request must be made within a year after the account has reached maturity.
Conclusion
SCSS scheme is designed for senior citizens and is one of the best options that offer its investors a regular income over the long run. This is an ideal choice for investment money as it is a low-risk investment option that guarantees income. It should be noted that other investment options serve the purpose of long-term investment and fulfilling retirement goals. The government of India has introduced the Senior Citizen Saving Scheme (SCSS) as a promising investment product for seniors.
