Post Office Senior Citizen Scheme

Post Office Savings Scheme India: Senior Citizen Savings Scheme (SCSS)

Overview

A new savings scheme called ‘Senior Citizens Savings Scheme’ has been notified with effect from August 2, 2004. The Scheme is for the benefit of senior citizens and maturity period of the deposit will be five years, extendable by another three years. Initially the scheme will be available through designated post offices through out the country.

Key Features -

The minimum investment is 1000Rs and in multiples of Rs.1000 subject to a maximum of Rs.15 lakh.

Citizens of 60 years of age and above are eligible to invest. Single or joint account (with spouse only) can be opened. Citizens who have retired under a voluntary or a special voluntary retirement scheme and have attained the age of 55 years are also eligible, subject to specified conditions.

The deposit will carry an interest of 9% per annum (taxable). The maturity period of the deposit will be five years, extendable by another three years.

Premature withdrawal after a period of one year will be allowed, subject to some deductions.

The investments in the scheme will be non-tradable and non-transferable. However, nomination facility will be available.

Non-Resident Indians and Hindu Undivided Families are not eligible to invest in the scheme.

Advantages
This Scheme is most beneficial to Senior citizens and provides a high rate of interest as compared to bank interest of 4.5- 4.75%. Although the interest on the deposit is taxable, the deposits themselves are tax free. As the post office is a department of the government of India, it is a safe investment. The principal amount is assured.

How to Start Post office Senior Citizens account
A Senior Citizen Account can be opened through any designated post office through out the country. The account can be opened by any individual 60 years of age and above either individually, or jointly (with spouse only).

Interest Payment

Interest @ 9% per annum from the date of deposit on quarterly basis. Interest can be automatically credited to savings account provided both the accounts stand in the same post office.

Mode of payment of interest

Interest payable Quarterly basis

- from the date of deposit to 31st march
- 30th June
- 30th September
- 31st December

Pre Mature Encashment

Account can be closed after one year and before second year. The amount equal to 1.5% on the balance amount will be deducted and balance will be paid to depositor
If the account is closed after 2 years from the date of opening of account, then the amount equal to 1% on the balance amount will be deducted and balance will be paid.

Safest Investment Option for Senior Citizens

Monthly Income Scheme (MIS) and Senior Citizen Saving Scheme (SCSS) are the best for Senior Citizens who desire monthly/quarterly interest. Invest in MIS / SCSS and transfer interest into RD account through SB account through written request and earn a combined interest of 10.5% (approx.).

This is the safest investment option for the Senior Citizens.