Scss, Senior Citizens Savings Scheme is a savings scheme sponsored by the government for individuals above 60. This scheme was introduced in 2004 by GOI to give a secure source of income to individuals above 60 after their retirement. Through this saving scheme, the government intends to give a secure and steady way for the senior citizens.
SCSS is a remunerative scheme by the government of India that ensures substantial and comparative returns to the customers. Additionally, this scheme gives a sense of security regarding capital loss to their customers.Anyone can apply for this government saving scheme by post or from any public or private bank.
The government introduced an update on 31 March 2023 under the Ministry of Finance regarding mandatory documents before registering for SCSS. A person must have an Aadhar card and PAN before registering for\ SCSS.
This scheme has given a secured platform for individuals to invest. Below are the characteristics of SCSS, a senior citizens saving scheme.
Quarterly Revision of Interest Rates:
Interest rates are revised quarterly under SCSS depending upon ongoing market factors and rates and inflation level. The derivation for this saving scheme depends on the factors like inflation rate, market rate, etc. It might happen that the rates did not change after revision because of the standing condition of the economy or there may be a little change.
Fixed Income:
Interest rate remains the same as at the time of investment till the date of maturity. As mentioned above it’s not altered because of the still economic conditions in the later quarters.
Customers are required to make at least a minimum deposit of 1000 rupees to have a scss account opened for them. The deposited amount is capped to the amount received as a retirement benefit of 30 lakh rupees.
Let’s take an example: a person receives rupees 10 lakh as a retirement benefit. Now the person can invest his retirement amount in this scheme. Anyone can open an individual or a joint account for himself or his or her spouse. A person might have multiple accounts under the senior citizen saving scheme but the total amount deposited in every account of SCSS shall not exceed the minimum limit fixed by the government.
Maturity:
The maturity Tenure for the senior citizen saving scheme is for 5 years after the extension up to 3 years. Then the maturity turnover will be a total of 8 years. To extend the period for maturity tenure the person will have to submit a form b to ask for an extension in the maturity period. Question can only extend his or her maturity tenure once only however the interest rate would apply quarterly on the senior citizen saving scheme. Let’s take as an example a person to deposit 700000 rupees under this scheme in 2024 when the interest rate in the market was 9.3%. The person will get an interest of 7.4% if the person extends the tenure of their senior citizen saving scheme.
Premature Withdrawals and Account Closure:
If a person wants to withdraw the amount before the maturity period. If the person withdraws the amount before the completion of 2 years the person will be charged with 1.5% of the amount as a penalty that he/ she deposited under scss. If a person decides to close his or her account before the completion of at least 2 years the person will be charged with one person of the deposited amount under scss. Also, candidates have a standard period of 5 years from which we can close their account within the first year without getting any penalty charges.
Suppose a person named Mr Ali deposits under the senior citizen saving scheme an amount of 5 lakh on 1st March 2018 and his account closes on 6 February 2020. Mr Ali will be charged with the penalty of rupees 7500.
Quarterly Disbursal:
Individuals are eligible to receive their quarterly disbursals against the amount deposited under the senior citizen saving scheme. The amount of interest will be credited on the first date of April, July, October, and January from the account of the customer.
Mode of Deposit:
A person will only be able to deposit his money in cash if the amount is below rs 1 lakh but if the amount exceeds then the person will have to pay in the form of cheques for scss.
Nomination Facility
Individuals can register a nominee when they are opening their accounts under the Senior Citizen Savings Scheme or at a later date.
In the case of the account holder’s death, before the maturity of the account, the nominee will receive the amount.
Security of Capital
This scheme is endorsed by the government hens get a cured and guaranteed place to invest capital and enjoy the security of food by the bank.
Substantial Returns
This is a scheme known for providing its subscriber the interest rates that are at their face value that are offered by other schemes deposits fixed deposits etc
Calculating the Interest under this Scheme
Interest on SCSS calculator every quarter and is the amount disbursed on the quarters. The SCSS is disbursed on tye the first date of every quarter April July October and January. Below are the primary points to know before calculating the amount to be disbursed.
The maturity date remains fixed for 5 years and can be later extended by Form B while the other two components are dynamic. The initial amount which is deposited is taken into account to calculate the interest rate.
How to Open an Account under the Senior Citizen Savings Scheme- SCSS?
The account under the SCSS Senior Citizen Saving Scheme can be opened by post office or through any private or public bank. Whereas the process will be the same for all the methods. The steps are mentioned below:
Step 1:Go to the post office or bank branch to open an account with SCSS
Step 2: Fill Form A
Step 3: Submit the important documents like photocopies of all the necessary documents addressed and identify proof.
Step 4: Give age proof
Eligibility under SCSS
A person is only eligible for SCSS if he is:
Above the age of 60 years
Or is the age of 55 but retired early under VRS rules
Or a retirer defense personnel
Important documents for SCSS to Apply for Senior Citizens’ Saving Scheme
