Now Get 8% Rate of Interest in Senior Citizen Savings Scheme – In recent days small savings schemes offer time deposits have higher interest rates than bank deposits.
As if now some small savings schemes such as Senior Citizen Savings Scheme(SCSS), National Savings Certificate, Monthly Income Scheme and Kisan Vikas Patra interest rates increase, allowing individuals to earn high rate of return by locking in at these higher rates. However, the interest rates for Public Provident Fund(PPF) and Sukanya Samriddhi Yojana have remain unchanged at 7.1% and 7.6%.
Now Get 8% Rate of Interest in Senior Citizen Savings Scheme
Duration of Deposit
In recent days small savings schemes offer time deposits have higher interest rates than bank deposits. The interest rate for a one-year time deposit has increased from 5.5% to 6.6%, while the rate for a similar fixed deposit with the State Bank of India is 5.75%. The interest rate for a two-year time deposit with the post office has also been raised to 6.8% from 5.7%. In comparison, the State Bank of India offers an interest rate of 6.75% for a one to two year deposit. For longer term investments, the post office offers a 7% interest rate for a five-year time deposit, compared to the State Bank of India’s rate of 6.25% for 5 to 10 year fixed deposits.
Senior Citizen Savings Scheme
The Senior Citizen Savings Scheme (SCSS) now offers a higher interest rate of 8%, which is 50-75 basis points higher than the rates offered by banks to senior citizens. This makes it a good option for seniors to earn higher returns by locking in their deposits. To be eligible to open an SCSS account, an individual must be at least 60 years old. Those above 55 years but below 60 years who have retired on superannuation or under voluntary retirement schemes are also eligible to open an SCSS account, as long as the account is opened within one month of receiving retirement benefits and the deposit does not exceed the amount received after retirement.
The lock-in period for the Senior Citizen Savings Scheme is five years, and it can be extended for an additional three years once. The minimum and maximum amount of investment allowed is Rs 1,000 and Rs 15 lakh, respectively. Interest is paid out every quarter. An individual can open any number of accounts, as long as the combined balance across all accounts does not exceed the maximum investment limit. A joint account can be opened with a spouse, with the first depositor listed as the investor.
However, the interest earned on SCSS is not tax-free. Investors in the Senior Citizens Savings Scheme (SCSS) can receive exemptions on the interest earned up to a limit of INR 50,000 (Indian rupees fifty thousand) per financial year under Section 80TTB of the Indian Income Tax Act.
How to invest in Senior Citizen Savings Scheme?
Here is the complete procedure to invest in the Senior Citizen Savings Scheme (SCSS), just follow these steps.
1. Check your eligibility
2. Collect the necessary documents
3. Choose an institution to open the account
4. Fill out the application form
5. Submit the form and documents properly
6. Deposit the money
7. Start earning interest