Senior Citizen Savings Scheme
Senior Citizen Savings Scheme is an investment instrument directed towards Senior Citizens.
Eligibility is 60 years of age or above, on the date of opening the account. Proof of age and a photograph of account holder are required. The age limit is reduced to 55 years in case of an individual retiring on superannuation or otherwise, or under VRS or special VRS, provided the account is opened within one month of date of receipt of retirement benefits. The retired personnel of Defence Services, excluding Civilian Defence Employees, shall be eligible irrespective of age limit.
Main Features and Rules –
- The interest rate is 9% p.a. payable quarterly. Annualized equivalent is 9.31% p.a. assuming the interest component is re-invested. The benefit of section 80C is available on investment but interest is fully taxable.
- The term for the scheme is 5 years. A onetime extension of three years is allowed, if applied within one year of its maturity.
- NRIs, PIOs and HUF are not eligible to invest in this scheme.
- Maximum limit is Rs.15,00,000/-(Rupees fifteen Lac only), however in case of retirees before the age of 60 years the limit is restricted to retirement benefits or Rs15 Lac whichever is less.
- Any Post Office in India doing savings bank work, or an office or banking company or institution authorized by Central Government can operate this scheme. An investor can open more than one account subject to the condition, that amount in all accounts taken together does not at any point of time exceed Rs.15 Lac. At the same accounts office, two or more accounts cannot be opened during one month. Some offices insist on a gap of 30 days.
- The investment is non transferable and non tradable.
- Premature closure is allowed after expiry of one year subject to following conditions – After expiry of one year but before 2 years, 1.50 % of deposit shall be deducted. After expiry of 2 years, 1% of the deposit shall be deducted. No deduction is made in case of closure of account due to the death of the account holder.
- Nomination facility is available even in case of joint account.