Everyone aspires to have relaxed and dignified retirement years. For this, it becomes important that you invest in schemes before and after your retirement that provide you assured income once your golden year sets in. The Senior Citizen Saving Scheme (SCSS) is one such government-backed scheme that provides a regular income to retirees.
In the current scenario, when there is uncertainty about which direction the investment markets and economy are heading, SCSS makes for a sensible investment for risk-averse investors. The returns in this scheme may not be as high as a market-linked product, but they are good enough to sustain some of your retirement needs. Take a look at the salient features of this scheme:
What Is Senior Citizens Savings Scheme (SCSS)?
It is a savings instrument that comes with a lock-in period of 5 years from the date of opening the account.
Who Can Open An Account?
It can be opened by an individual who has attained the age of 60 years or above on the date of the opening of the account. You can also open an account if you have attained the age of 55 years or more but less than 60 years and has retired under a superannuation or otherwise. Retired personnel of defence services (excluding civilian defence employees), who has attained the age of 50 years can also invest in the scheme (subject to other specified conditions).
Amount To Invest
The scheme allows you to invest in the multiples of Rs.1000 but your deposits in the account should not exceed Rs. 15 lakh in a financial year. You can invest in this scheme individually or jointly. As per the SCSS rule, your investment in the scheme should not be above the money received on retirement. This simply means that either you can invest Rs.15 lakh or you can invest the entire retirement benefit amount, whichever is lower.
Tenure Of The Investment
The scheme comes with a lock-in period of 5 years from the date of opening of the account. You can extend the account for a further period of 3 years.
What Is The Current Rate OF Interest?
The current rate of interest stands at 7.4% per annum. The interest is payable from the date of deposit of 31st March/30th Sept/31st December on the first working day of April/July/October/January as the case may be, in the first instance and thereafter, interest shall be payable on the first working day of April/July/October/January.
You are allowed to make premature withdrawals after a year of opening the account subject to certain conditions. If you close the account after the end of one year but before the end of two years, an amount equal to 1.5 per cent of the amount will be deducted. The remaining will be paid to the depositor. If you close the account after two years from the date of opening the account, an amount equal to 1 per cent will be deducted and the remaining will be paid to the depositor.
You can claim tax deductions for amount invested up to Rs. 1.5 lakh per financial year under Section 80C of the I-T Act
You can open an SCSS account in any of the authorised banks or post office branches across India.
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