Benefits and features of Senior Citizen Savings Scheme (SCSS)

July 17, 2020

Benefits and features of Senior Citizen Savings Scheme (SCSS)

When there are no means of earning income at the time of retirement, you can give your savings a good boost with Senior Citizen Savings Scheme (SCSS). Read further to know more about its benefits and features. 

Are you going to retire soon? Retirement is an exciting, as well as an overwhelming phase. You look forward to the golden years spending it peacefully while enjoying your ample time indulging in travel and other activities. This is how a retiree dreams of living a post-retirement life. All of this is possible only if you have financially secured your life by building a retirement corpus. Being above 60 years of age can also be burdensome for some in terms of funds. You may have saved over the working years, but will those funds help to meet the same standard of living that you expect to live post-retirement? The inflation rates, healthcare expenses, and other expenditures are constantly on the rise; the retirement corpus wouldn't suffice at times. You need to have access to regular income.

As a senior citizen, you can still ensure a secure and steady income by investing in SCSS. This is a Government-backed investment plan targeted for people, 60 years and above. This is considered as one of the profitable savings schemes as it offers attractive returns.

Features of SCSS: 

  • Any senior citizen can initiate the investment in SCSS with a minimum savings of Rs 1,000 and a maximum of Rs 15 lakh.
  • The SCSS interest rate is 7.4% per annum. The rate is revised every quarter, and the final rate is decided considering factors like inflation level, market scenario and others. 
  • The tenure of the savings scheme is five years. You can choose to extend the tenure for another three years. You have to submit a request to the bank within one year from the maturity. You can only select to extend the tenure just once.
  • You can make a premature withdrawal from SCSS Account after one year of the account opening. 
  • If you are opening an SCSS scheme, you are eligible to receive quarterly disbursals. Banks provide interest payments on the 1st of April, July, October and January. 

Benefits of SCSS: 

  • Safe investment option as it an initiative by the Government of India. 
  • You can open an SCSS Account at any authorised bank or any post office in India. 
  • As compared to Fixed Deposits (FDs), this type of investment option offers substantial returns at the rate of 7.4% per annum.
  • You also have tax-saving benefits, wherein you can claim up to Rs 1.5 lakh in a financial year under Section 80C of the Income Tax Act. The interest payments are subject to taxation as per the tax slab rates. Besides, if your interest income exceeds Rs 50,000 in a year, then it is subject to Tax Deducted at Source (TDS).

As a senior citizen, investing in SCSS is a reliable and safe option for you as it keeps your capital secure and offers good returns. It is easy to open the account at ICICI Bank with your ID and address proof documents. 

Terms and Conditions apply.

 

 

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