Post Office Senior Citizen Savings Scheme (SCSS): Small savings schemes offered by the post office have always been a better investment alternative. The best part is that the deposit is completely secure and has a guaranteed return. Market changes have no effect on these assets. A range of deposit options are available at the post office.
Receive Rs 6, 85,000 On Maturity
If you invest a lump sum of Rs 5 lakh in the Senior Citizens Scheme at a rate of 7.4% (compounding) each year, the total amount after 5 years, or at maturity, will be Rs 6, 85,000. You would receive an interest benefit of Rs 1, 85,000 in this case. As a result, interest would be paid every quarter at a rate of Rs 9,250.
Annual Interest will be 7.4%, Maturity Period is 5 Years
The yearly interest rate in this program will be 7.4%, according to material on the post office's website. This scheme has a 5-year maturity period. Deposits in multiples of Rs 1000 are allowed. A maximum investment of Rs 15 lakh is also possible. It must be invested in one go.
A person who is 60 years of age or older can open an account with SCSS. If a person is 55 years old or older but not yet 60 years old and has taken VRS, he can also open a SCSS account. However, he must open this account within one month after getting his retirement benefits, and the amount placed in it must not exceed the number of benefits received.
As per website, a depositor can have multiple accounts under SCSS, either singly or jointly with his or her spouse. However, the total investment limit cannot exceed Rs. 15 lakhs. The account can be started in cash for amounts less than 1 lakh, but for amounts greater than that, a cheque must be used.
Nomination Facility is Available During Opening & Closing
The nomination facility is available during the time of the opening & closing the Senior Citizen Savings Schemes. This account can be transferred from 1 post to another. In this account holder can do the premature closure. But, the post office will deduct 1.5% of deposit only on closing the account after 1 year of the account opening, while 1% of deposit will be deducted after 2 years of the closure.
Scheme is Extended After 3 Years of Maturity
SCSS can be extended for another three years after it reaches maturity. The application must be submitted within one year of the maturity date to qualify. Deposits in this account are also eligible for a tax deduction. Section 80C of the Income Tax Act exempts investment in this program.
Interest earned in the SCSS is taxed. If the total interest income from all of your SCSS surpasses Rs 50,000 per year, your TDS will begin to deduct. Your interest is reduced by the tax amount. You can claim TDS exemption by submitting Form 15G/15H, if your interest income does not exceed the specified amount.
