Retirement doesn’t come with only physical fatigue and ageing muscular issues; it also brings stress and complexities related to finances. With getting older, it increases the financial burden and gives us a chance to explore various plans and retirement schemes. In India, the retirement age typically starts at 55-60, but planning and strategies often begin earlier, during working and studying years. Senior Citizen Savings Scheme — one of the several government-backed small savings schemes — simplifies complex questions and provides a good framework for living a better life in our old age.
5 Facts About the Senior Citizens Savings Scheme
The Senior Citizens Savings Scheme (SCSS) is a government-guaranteed savings instrument designed to provide financial security and a regular income to retirees.
Here are five things every investor must know before opening an account, according to information available on the India Post website.
1. Eligibility | who can apply?
All senior citizens aged 60 or older can open accounts under this plan.
Persons aged 55 to 60 years, who have retired from service due to superannuation, are allowed to join the savings scheme if they apply for the same within a month of receiving their retirement benefits.
Defence Forces personnel are eligible if they are 50 years old or more.
Accounts can either be opened by individuals or jointly by spouses.
2. Rate of Interest
This saving scheme earns an interest rate of 8.2 per cent per annum.
Interest is credited quarterly on the first working day of April, July, October, and January every year.
This will provide a quarterly income for regular periods.
3. Minimum Investment
The minimum investment required in this savings scheme is Rs. 1,000.
Investors can deposit any amount in multiples of Rs 1,000.
Only one deposit may be made into any such savings account.
The maximum deposit limit stands at Rs. 30 lakh.
4. Lock-in or Maturity period
This savings scheme will run for five years.
The scheme matures after five years.
Account holders can extend it for a further three years by applying within one year of maturity.
This extension is available only once, making the maximum tenure eight years.
5. Premature Closure
Premature closing is allowed, but a penalty is charged.
Early closing within one year results in forfeiture of all interest.
Early closure between one year and two years results in a deduction of 1.5 per cent of the deposit amount.
Early closure beyond two years involves a deduction of 1 per cent of the deposit amount.
Multiple withdrawals are not allowed.
In case of death, the total amount together with interest is paid to the holder.
