India Post currently offers interest at the rate of 8.6 per cent on investment in the Senior Citizen Savings Scheme (SCSS) at designated post office branches. The interest rates applicable to small savings schemes such as Senior Citizen Savings Scheme (SCSS) are currently reviewed by the Ministry of Finance on a quarterly basis. For the quarter ending March 31 - the fourth quarter of the current financial year, the finance ministry last month retained the interest rates at existing levels. The Senior Citizen Savings Scheme (SCSS) is part of the nine government-run small savings schemes.
Here's all you need to know to invest in the Senior Citizen Savings Scheme, which is one of the nine small savings schemes offered at designated post offices in the country:
For the fourth quarter of current financial year, investment in the Senior Citizen Savings Scheme (SCSS) fetches interest at the rate of 8.6 per cent. The quarterly interest is paid on the first working day of April, July, October and January.
Minimum Investment For Opening Account
For opening an account under the Senior Citizen Savings Scheme, one needs to invest a minimum of Rs 1,000, according to the India Post website - indiapost.gov.in. The account can be set up with a single payment of any higher amount in the multiple of Rs 1,000.
Maximum Investment Allowed
The government currently allows a maximum investment of Rs 15 lakh in the Senior Citizen Savings Scheme.
A Senior Citizen Savings Scheme account can be set up in favour of an individual of 60 years of age and above.
The account can also be set up in favour of persons between 55 and 60 years of age under certain conditions. In such cases, the individual retiring on superannuation or under a voluntary retirement scheme (VRS) is required to open the account within one month of receipt of retirement benefits. Also, the amount of investment should not exceed the amount of retirement benefits, according to the India Post website.
Although the investment in Senior Citizen Savings Scheme matures in five years, an option to close the account prematurely is available. The premature closure is allowed after one year against deduction of 1.5 per cent of the deposit, and 1 per cent after two years.
A TDS (tax deducted at source) is applicable in case the interest amount exceeds Rs 10,000 in a year.
Also, investment in the Senior Citizen Savings Scheme qualifies for deduction of taxable income under Section 80C of the Income Tax Act.