Senior Citizens Often Depend bank FD For regular income after retirement. During these difficult times of the COVID-19 pandemic, where central banks across the world have cut interest rates to save their economies from falling into recession, it is imperative to have a plan that is beneficial and delivers better returns. An attractive investment option for the elderly population, which includes those aged 60 or above, is the Senior Citizen Savings Scheme.
Senior Citizen Savings Scheme (SCSS) is a government backed retirement benefit scheme. Elderly people in India can deposit a large amount in the program individually or collectively and get regular income. The Senior Citizens Savings Scheme offers an annual return rate of 7.4 percent.
eligibility
Senior Citizen Savings Scheme is available to all people above 60 years of age. Those who have reached the age of 55 years but are below 60 years of age can also create accounts under this scheme if they have opted for Voluntary Retirement. This incentive is also available to retired military members over the age of 50.
minimum balance
A minimum deposit of Rs 1,000 is required to start an account under this scheme. The maximum can be increased up to Rs 15 lakhs. The amount deposited in the account should be in multiples of Rs 1,000. Apart from individual accounts, banks allow you to create joint bank accounts with your spouse under the Senior Citizens Savings Scheme.
Rate of interest
The Senior Citizen Savings Scheme offers the highest interest rate of 7.4% among many minor savings schemes. The finance ministry reviews the interest rate on a quarterly basis. Interest is paid on the first business day of April, July, October and January every year.
maturity
Accounts created under the Senior Citizens Savings Scheme have a tenure of five years. Once the account matures, it can be extended for an additional three years.
premature closure
If an account is closed after one year but before the end of two years, a penalty of 1.5 per cent will be deducted. If the account is closed after two years, a penalty of 1% is levied.
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