One of the most significant life goals of every individual is to be financially independent. All of us aspire to create enough savings so that we can lead a financially secure retired life. We especially look for investment options that can help us earn a source of income when our regular income sources begin to diminish. Keeping this in mind, the Indian Government launched the Senior Citizens Savings Scheme in 2004. Here are some crucial facts about this scheme.
Eligibility criteria
To be able to invest in the Senior Citizens Savings Scheme, you need to be
A resident Indian
Over the age of 60 years
An individual who has opted for VRS (Voluntary Retirement Scheme) after the age of 50 years
Retired defence personnel, irrespective of the retirement age
Individuals opting for VRS or retiring from the defence services must open the account within a month of retiring
Account opening details
To open your SCSS scheme account, you need to visit your nearest post office or participating bank. You also need to submit Form A, which you can avail at the bank or post office or download from the website of the Indian Postal services. You must fill the form, attest your photograph and submit age, ID and address proof documents to invest in this scheme. You also need to provide the cheque of the amount you wish to deposit. Currently, there are no facilities to open the SCSS account online.
Minimum and maximum deposit amounts and investment tenure
The minimum amount you can deposit under the SCSS Scheme is ₹1,000. You can increase your deposits as and when you please in multiples of ₹1,000. The maximum deposit amount permitted under this scheme is ₹1,500,000. Also, the scheme comes with investment tenure of 5 years. However, you can extend the investment for a period of 3 years. Currently, you can avail this extension only once. If you wish to, you need to apply to extend the scheme between the 5th and 6th year of investment.
Premature withdrawals
If you need to, you can prematurely withdraw from the SCSS 2004 scheme. While the facility to withdraw prematurely is available, you need to bear in mind that you can withdraw only after completing one year of investment. Also, you are required to pay a penalty of 1% and 1.5% if you decide to prematurely withdraw from the scheme after 1 and 2 years respectively.
Interest earned on deposits
The SCSS 2004 is currently one of the highest interest-paying savings schemes. The interest rate is revised every quarter. In the quarter of January to March 2020, investors have earned interest rates of 8.6% on deposits under this scheme.
So, if you are a retired individual looking for a safe, government-backed savings scheme, you can consider investing in the Senior Citizens Savings Scheme. You can get more details regarding the scheme in your bank or post office.
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