An SCSS is a government-sponsored retirement savings plan. It allows senior citizens to either collectively or individually invest in such schemes to obtain tax benefits and a regular income post-retirement. It is important to have a retirement corpus so that when you plan to stop working, you will have a fund to rely on for your everyday expenses. Retirement and pension plans are designed to help you accumulate a corpus that can be your helping hand during your old age. Senior Citizen Savings Scheme is one of the retirement benefits program introduced by the Government that allows senior citizens to plan and build their retirement fund.
What is the Senior Citizen Savings Scheme?
Senior Citizen Savings Scheme is a saving and investment scheme for people over the age of 60 years. The primary goal of this program is to assist senior persons in securing an income after they retire so they can have a peaceful retirement life. Senior Citizen Savings Scheme retirement benefits allow you to balance out your present and future decisions. SCSS is the best retirement investment scheme to help you manage your financial decisions. This scheme offers protection of capital along with other quarterly interests as a source of income.
Senior Citizen Savings Scheme is backed by the government, making it one of the most reliable sources of income for senior citizens and army personnel. Investing in the Senior Citizen Savings Scheme retirement scheme can help you avail income tax exemption as well.
5 Benefits of Investing in SCSS
There are numerous benefits of having a retirement plan in your investment portfolio. Investing in the best retirement plan helps you to be prepared for any emergency that may come up. Here are 5 benefits of investing in a Senior Citizen Savings Scheme:
1. Guaranteed Returns - Senior Citizen Savings Scheme is one of the safest and most reliable investment options for elderly citizens because it is a government-backed savings program.
2. Increased Interest Rate - Senior Citizen Savings Scheme pays an annual interest of 7.4 percent. As a result, it outperforms other traditional options like savings accounts and fixed deposits.
3. Tax Benefit - The Income Tax Department of India allows tax exemptions under section 80C of up to 1.5 lakh rupees annually.
4. Simple - The investment process is simple. All you need to do is open an Senior Citizen Savings Scheme account at any bank or post office and avail your benefits. The account is even transferrable all over India.
5. Quarterly Interests - Interest is paid to account holders quarterly under Senior Citizen Savings Scheme. Making it more beneficial. Interest is credited on the first day of April, July, October, and January annually.
How to Open a Senior Citizen Savings Scheme Account?
An Senior Citizen Savings Scheme account may be opened at a bank as well as at a post office across India. An SCSS account is mandatory for those who are willing to avail themselves of these benefits. A senior citizen must invest in retirement plans and open a Senior Citizen Savings Scheme account. You must submit a document of KYC and include proofs such as identity and address.
1. On the top left corner of the form, write the name of the Post Office branch.
2. Enter the account number if you already have a Post Office savings account.
3. Fill in the Post Office branch address in the 'To' field.
4. Copy and paste the account holder's photo.
5. Fill in the account holder's name in the first blank space and select the 'SCSS' option from the drop-down menu.
6. You do not need to choose any of the 'Additional Facilities Available' sections because they are only relevant if you apply for a savings account.
7. Choose an account holder type, such as self, minor with a guardian, or a person of unsound mind with guardian.
8. Choose between single, either or survivor, or all or survivor accounts.
9. Enter the deposit value in numbers and then in words. In case of a cheque, write down the cheque number.
10. Write down the details of the account holder.
11. Provide document proof and tick those cells that represent your documents.
12. You must sign the papers at the end of each page.
13. Choose a nominee and fill in the details of that nominee.
You can also open a Senior Citizen Savings Scheme account by visiting a bank.
1. Visit your nearest bank
2. Request and fill up the application form for Senior Citizen Savings Scheme.
3. Submit the form and the required documents (KYC, address, and identity proofs) to the bank employee.
4. The Senior Citizen Savings Scheme is activated after the bank has processed your application and payment.
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Who can Invest in Senior Citizen Savings Scheme?
Investors can make deposits in lump sum ranging between 1000 rupees to 15 lakh rupees or the amount that has been received on retirement. It is preferable to make deposits as a cheque if the limit exceeds 1 lakh rupees. You can invest in a Senior Citizen Savings Scheme, if you are:
1. Indian Senior citizens aged 60 and above.
2. Citizens in the 55-60 year age group have opted for the Voluntary Retirement Scheme (VRS) or superannuation .
3. Retired Hindu Undivided Family and Non-Resident Indians are not allowed to invest in this scheme.
4. Retired military personnel between the ages of 50 to 60.
5. The investment must be made within a month of receiving retirement benefits.
Also Read about - Saving Schemes
What is the Maturity Period of Senior Citizen Savings Scheme?
A Senior Citizen Savings Scheme matures 5 years of its activation. However, the account holder has an option to extend the account for up to 3 years. The request has been made within one year of the SCSS maturity date. You may want to withdraw your Senior Citizen Savings Scheme account after one year of activating it. However, this leads to penalties. These penalties depend on the time of withdrawal.
1. 2 Year Period - If you leave the program before the two-year period has passed a penalty of 5% of your deposit will be deducted as a penalty.
2. 2 to 5 Years Period - If you leave the scheme between 2 and 5 years after starting your account, you will be charged 1% of your SCSS deposit as a penalty.
The account will be closed if the primary account holder dies before the account's actual maturity date, and any maturity proceeds will be handed to the legal heir/nominee. For deceased claims, the nominee or legal heir must submit a formal application in the prescribed format, along with a copy of the death certificate, for the account to be closed.
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You May Also Read About - Post Office Monthly Income Scheme (POMIS)