- About Coverfox
Retirees looking for investment products with minimal risk are advised to consider opting for Senior Citizens Savings Scheme. This article highlights the many benefits offered to senior citizens for deposits made in SCSS.
Senior Citizens Savings Scheme (SCSS) is a popular investment tool in India that provides financial security to individuals above the age of 60 years. The scheme offers a regular flow of income as well as tax benefits under Section 80C of the Income Tax Act, 1961. SCSS is backed by the government, and is therefore among the most-safest investment options. Its interest rate is fixed by the Ministry of Finance from time to time. One can open an SCSS account through any of the certified banks or post offices across the country. This article is intended to give readers a thorough understanding of what an SCSS account is and the many benefits associated with this investment avenue.
The below entities are eligible to open an SCSS account:
An applicant can open an SCSS account at any of the authorized banks or post office branches across India. The documents that will be required to open an SCSS account are as follows:
One can invest up to Rs. 15 lakhs (singly or jointly) in an SCSS account (in multiples of Rs. 1,000). The amount put into the account cannot be greater than the sum that the depositor has received on retirement. Thus, it can be said that the individual can invest either the amount received as a retirement benefit or Rs. 15 lakhs, whichever is lower.
According to the India Post website, an SCSS account can be opened by cash for amounts less than Rs. 1 lakh and by cheque for Rs. 1 lakh and above. For payment made via cheque, the date of investment in the scheme shall be the date when the cheque is realized in the government's account.
The rate of interest on SCSS accounts is determined by the Ministry of Finance from time to time. According to the Income Tax Department website, a deposit made under Senior Citizens Savings Scheme Rules, 2004, on or after the 1st day of July, 2019, shall fetch interest at the rate of 8.6% p.a. from the date of deposit. It additionally stated that interest shall be payable from the deposit date to 31st March, 30th June, 30th September, or 31st December on the first working day of April, July, October or January, as the case may be, in the first instance. Thereafter, interest shall be paid on the first working day of April, July, October or January.
The advantages of choosing this investment route are as follows:
As seen from all the points mentioned above, one can enjoy many benefits by making investments in a Senior Citizens Savings Scheme. Along with providing financial security to the senior citizen, an Senior Citizen Savings Scheme account helps the depositor enjoy tax benefits under Section 80C of the Income Tax Act. While opening an SCSS account, the depositor must ensure to furnish all the required information. In the event it is found that the information submitted is not accurate, the account will be closed right away.