Senior Citizen Saving Scheme

This is a opportunity for investment for Senior Citizen individuals who has completed the age of 60 years or above. Also individuals  who are above the age of 55 years but less than 60 years and has retired under VRS (Voluntary Retirement Scheme) or a SVRS (Special Voluntary Retirement Scheme) on the account opening date and within three months from the date of retirement.

Under this scheme, any Senior citizen individual may open one or more account in the multiple of INR.1000/-, subject to a maximum limit of INR.15 lakh and earn Interest @ 9.20% per annum payable on quarterly basis.  Such interest earned gets credited to savings account (provided both the accounts are in the same post office).

For defense personnel, no age limit is specified, subject to fulfillment of other specified conditions. This account may be opened individually or jointly along with spouse. However, Non-resident Indians (NRIs) and Hindu Undivided Family (HUF) are not eligible to open an account. The facility for nomination is available in this Scheme.

SCSS restricts withdrawal for the period of five years from the date of opening of the account. However, depositor have the option to extend the account 3 years more. Premature closure of account is permitted only with a

– deduction of 1.5% of the amount deposited after one year but before 2 years and

– deduction of 1% of the deposit after 2 years.

– However, in the event of death of depositor, before the maturity period. The deposit along with interest is refunded, after closing the account, without any deduction.

– Post Maturity Interest at the rate applicable to the deposits under Post Office Savings Accounts from time to time is admissible for the period beyond maturity.

The investment under this scheme qualify for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.

Monthly Income Scheme (MIS) and Senior Citizen Saving Scheme (SCSS) are ideally suitable for Senior Citizens who wish to get interest payment on monthly or quarterly basis. A route of investment where prinicipal is invested in MIS or SCSS and then interest is transferred into RD account via SB account, an earn a yield of approx. 10.5 % .

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