The current interest rate for Senior Citizen Savings Scheme is 8.7%. This interest rate is applicable from 1st October 2018 till 31st December 2018. It falls under the small savings schemes of the Government of India. Therefore, its interest rate remains the same in the Post Office and banks (SBI, PNB etc.).
Table of Contents
- 1. Who Can Open Senior Citizen Savings Scheme Account
- 2. Government announces new interest annually
- 3. Calculation of Interest of Senior Citizens Savings Scheme
- 4. Tax Exemption On Senior Citizen Savings Scheme
- 5. Only Indian citizens can open an account
- 6. Report citizenship change in a month
- 7. Interest Payment of SCSS
- 8. Determined to a quarterly payment
- 9. How much can minimum and maximum deposit?
- 10. Retirement can’t exceed the amount deposited
- 11. Money is deposited for 5 years
- 12. Loss of account closure of maturity
- 13. Documents required for Senior Citizen Savings Account
Source :- growwealthadvisors . com
Who Can Open Senior Citizen Savings Scheme Account
You can open the account of Senior Citizens Savings Scheme at any bank or post office branch. Any Indian citizen who has completed 60 years of age can open a Senior Citizen Saving Scheme Account.
Under the law, employees who are separated from the service, or voluntary retirement, can open a Senior Citizen Saving Scheme account at the age of 55 years.
If the army personnel take earlier retirement, they can open a Senior Citizen Saving Scheme account after completing 50 years of age.
A joint venture with a husband or wife can also open a Senior Citizen Saving Scheme Account. No other related, relative, or familiar joint account holder is acceptable.
The account can be opened only at the individual level in the Senior Citizen Savings Scheme. (HUFs) In the name of Hindu Undivided Family or any organization, account can’t be opened in this scheme.
Family or institution name can’t open Senior Citizen Saving Scheme account
Government announces new interest annually
The Indian government announces new interest rates on all its small savings schemes every three months. Senior Citizen Savings Scheme Account is also one of the small savings schemes of the Government of India, which is designed keeping in mind the old age of Above 60 years.
The earlier change in the interest rate of the Senior Citizen Saving Scheme was done at the end of June 2017. This was implemented for the quarter from July to September 2017. At that time, the interest rate was 8.5% on the Senior Citizen Saving Scheme it was then reduced by 0.2% to 8.3 %.
After this, at the end of December 2017, the government again announced a 0.2% reduction in interest rates on PPF and other small savings schemes. But the interest rate on the Senior Citizen Saving Scheme remained the same as before 8.3%.
Source :- vtprealty . in
Calculation of Interest of Senior Citizens Savings Scheme
The method of calculating interest on the Senior Citizens Savings Scheme is very easy. For example, at present, the interest rate is 8.7% per annum, according to this calculation will be as follows.
- The rate of interest for 12 months – 8.7%
- The rate of interest for 1 month – 0.725%
- The rate of interest for 3 months – 2.175%
If you multiply 2.175 on your deposit amount, you can calculate the installment given in every quarter. For example, if you have deposited INR 1 lakh, you will get an installment of INR 2175 in every three months.
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Tax Exemption On Senior Citizen Savings Scheme
You get tax exemption under Section 80C on the Senior Citizen Saving Scheme. Under this section, you can get a tax exemption on investment (up to a certain type of investment only) up to INR 1.5 lakh annually. Whatever investment you have to invest over 1.5 lakh, you will have to pay tax as per Taxable.
Only Indian citizens can open an account
Indian (NRIs) citizenship of another country can’t open an account in this scheme. Even after opening an account, if a person takes the citizenship of another country, then on the date the person becomes a citizen of another country, his account will be considered as closed.
Source :- nbcnews . com
Report citizenship change in a month
In the event of obtaining foreign citizenship, the account holder is mandatory to give notice to the post office or anywhere in his bank, within one month. On that deposit, interest will be charged according to the interest rate of the general savings account after that date and accordingly, tax saving norms will also be applicable.
At the end of September 2018, the government announced a hike in its various small savings schemes. In this, the interest rate of Senior Citizen Savings Scheme was also increased by 4% to 8.7%.
In case of a change in interest rate, keep in mind that any change does not affect the old accounts. As much interest was going on while opening the account, the same interest would be available on your deposit for the next five years.
For instance, if you have opened your Senior Citizen Savings Account on April 15, 2018, while interest rate of 8.3% is applicable on this account. So, the full maturity period of this plan will be up to 5% (up to 15th April 2023) deposited in your money only 8.3%. Regardless, the government has reduced the interest rate on this. And yes, even if interest rates have been increased, you will not get the benefit.
Interest Payment of SCSS
As we mentioned above, in lieu of the lump sum amount deposited in the Senior Citizen Savings Scheme, its interest comes to the account holder every quarter. Money goes to your account on the first date of the first month of every quarter. In the event of a holiday due on holiday or other reason that day you will get the money in the next working day.
Determined to a quarterly payment
There are four quarters of three-three months in a year. They get money in the following places.
- First Quarter-April to June 1st April / 1st Working Day
- Second Quarter – July 1st to 1st July / 1st Working Day
- Third Quarter – October to December 1st October / 1st Working Day
- Fourth quarter-January to March 1st January / 1st Working Day
With this, you can understand that you will get your installments in the Senior Citizens Savings Scheme Account on 1st April, 1st July, 1st October, and 1st January respectively. You have deposited the money on any date; your installments will meet these dates.
How much can minimum and maximum deposit?
In Senior Citizen Savings Scheme, you can open an account by depositing at least INR 1000. More than 15 lakhs can be deposited. The account up to INR 1 lakh can be opened by depositing cash. On the opening of more than INR 1 lakh, the account will be deposited only through the check.
Retirement can’t exceed the amount deposited
Keep in mind that in the Senior Citizen Savings Account scheme, there is a possibility to deposit up to INR 15 lakh in any way, but if you get less than INR 15 lakh after your retirement, and then you can’t collect INR 15 lakh. For instance, if you get INR 12 lakh after the retirement, you can deposit up to INR 12 lakh only. In fact, the amount of money that is less than 15 lakhs in retirement and retirement is exempt from the same investment.
Source :- ndtv . com
Money is deposited for 5 years
In the Senior Citizen Savings Scheme, one lump sum amount has to be deposited for at least 5 years. If the maturity period is over, then you can increase it for the next 3 years. But, in the event of Emergency, you can close it before maturity. You can do this after completing 1 year of account.
Loss of account closure of maturity
Withdrawing the first account of maturity (5 years), you will get less interest than the normal rate.
If you withdraw money 1 year or 2 years ago, then you will get 1.5% less interest than the normal interest rate. If you close the account after completion of 2 years then the normal interest will get 1% less money.
However, if your account has already completed the initial maturity period of 5 years and it has been extended for the next 3 years, then in the middle of the closure of the account, there will be no loss of interest.
Documents required for Senior Citizen Savings Account
First, the Senior Citizen Saving Scheme will be filled by taking the form. You will get this form post office or bank. The identity proof, proof of address, along with the application, you have to fill in the KYC form (Know Your Customer Form – KYC) which you get only with the application form. Apart from this, you have to take the following documents with you, which you submit with the application, in the bank or post office.
- Applicant’s two passport size colorful photo
- Xerox of Aadhaar number and Aadhaar card.
- Xerox of PAN (Permanent Account Number) number and PAN card
- Certificate of residence or address i.e. address proof
- Age certificate Age proof
- In the case of retirement, the certificate issued by the employer,
- Dates related to the money received as retirement benefits (Proof of date of disbursal of the retirement benefits)
- In the case of retirees, a certificate from the employer