India Post or Department of Posts, which runs the postal network of the country, offers several savings schemes with different interest rates. Senior Citizen Savings Scheme (SCSS) is one of the nine small savings schemes offered by post office. The minimum amount required to open the SCSS account is Rs. 1,000 and the maximum amount should not exceed Rs. 15 lakh, India Post noted on its website indiapost.gov.in. The account can be opened by cash if the amount is below Rs. 1 lakh. However, if the amount is Rs. 1 lakh or more, investors need to deposit a cheque. The scheme offers an interest rate of 8.7 per cent per annum.
Here are key things to know about post office Senior Citizen Savings Scheme (SCSS):
1. Eligibility: Post office SCSS account can be opened by an individual of 60 years or above. However, if any person who is 55 years or more but less than 60 years, and has retired on superannuation or under VRS (Voluntary Retirement Scheme) can also open the SCSS account subject to the certain conditions, according to India Post.
2. Maturity: The maturity period of the scheme is five years. After maturity, the account can be extended for further three years within one year of the maturity by giving an application in prescribed format. In such cases, account can be closed at any time after expiry of one year of extension without any deduction, said India Post.Read more ↓
3. Premature closure: Under the post office’s scheme, premature closure is allowed after one year on deduction of an amount equal to 1.5 per cent of the deposit and after 2 years, 1 per cent of the deposit is deducted.
4. Income tax benefit: Investment under this scheme also qualifies for benefits under Section 80C of the Income Tax Act. TDS is deducted at source on interest if the interest amount is more than Rs. 10,000 per annum.
5. Other facilities: Under the scheme, nomination facility is available at the time of opening and also after opening of account. A depositor may operate more than one account in individual capacity or jointly with spouse and the account can also be transferred from one post office to another.