The pandemic has forced even the most established economies of the world to rethink their financial strategy. For the commoner, things have changed as well, with a growing emphasis on limiting expenses and increasing savings. Senior citizens or people more than 60 years old are more susceptible to financial risk as their income stream is unlike the other age categories. For such senior citizens, let us understand why the senior citizen savings scheme still makes sense in the current times.
What is SCSS (Senior Citizen Savings Scheme)?
SCSS is a useful and long-term saving financial instrument that offers protection and additional facilities which are typically part of any government-sponsored savings or investment scheme. These schemes are available via approved banks and post offices across India.
Who is eligible for SCSS?
- Senior citizens aged 60 years or older in India
- Retirees in the 55-60 age range opted for the Voluntary Retirement Scheme (VRS) or Superannuation. Here, the contribution must be made within a month of the retirement benefits being received
- Retired defence workers who are at least 50 years of age
- HUFs and NRIs are currently not eligible to invest
Benefits of SCSS
- Stability: Being a government-backed scheme, senior citizen saving schemes in banks and other locations offer all the stability and assertion associated with all government schemes.
- High-interest rate: The framework has a high 7.4% annual interest rate, which is better than any of the business 80C tax savings instruments.
- Tenure: The account has an initial maturity period of five years, although this can be extended to another three years. Such a feature encourages senior citizens to have this saving scheme as a medium or long-term investment product in their financial portfolio.
- Tax: Under the section 80C of the IT Act, 1961, up to Rs. 1.5 lakh per annum, the investment made under this scheme is tax-deductible.
- Flexibility: One can invest in multiples of Rs. 1,000 up to the overall limit of Rs. 15 lacs.
- Withdrawal: A premature withdrawal option in the event of a financial emergency (with applicable penalties) and the amount would be credited to your online bank savings account
- Quick accessibility: The instrument can be operated anywhere in India via Post Offices or designated bank branches.
- Nomination: When opening an SCSS account, the nomination facility is accessible by applying part of Form C. The Branch passbook also accompanies this request.
Information needed for Senior Citizen Savings Scheme
Before you open a senior citizen savings scheme in banks and post offices, you need to provide the below information:
- Name of Applicant and PAN
- Name of the father/mother/husband/wife of the primary applicant
- In the case of a joint SCSS account with a partner, you must state your spouse’s name, age, and address
- Sum and amount of Cheque/Demand Draft (if applicable)
- Name, age, and address of the nominee
SCSS should be the first preference of senior citizens who want risk-free returns on their savings because the deposits under the scheme give you higher returns than those typically available under other comparable secure investment avenues.
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