The Senior Citizens' Savings Scheme (SCSS) is a government scheme that helps seniors save money for retirement and receive quarterly interest payments. This account can be created at any bank or post office singly or jointly with your spouse. It has a 5-year maturity period that can be extended up to an additional 8-year period.
The interest rate on SCSS for the quarter ending March 31, 2022 is 7.4%.
Opening an SCSS account
Account can be opened with a minimum deposit of Rs 1,000 or any amount in multiples of Rs 1,000, but not more than Rs 15 lakh. The scheme allows you to have many accounts. The total amount of deposits in all SCSS accounts, however, must not exceed the maximum limit. Section 80C allows for a deduction for investments made in the SCSS account.
Interest on SCSS
Interest will be paid on the 31st of March, 30th June, 30th September, and 31st December each year, starting from the date of deposit on the 31st March, 30th September, and 31st December in the first instance. As of now, interest paid on SCSS is 7.4 percent.
If an account holder does not claim the interest due every quarter, the interest does not generate extra interest. Interest can be withdrawn via auto credit or ECS from a savings account held at the same post office. The monthly interest on SCSS accounts at CBS Post Offices can be credited to a savings account or you can link your bank savings account by filling out the required form.
If total interest in all SCSS accounts in a financial year exceeds Rs.50,000, interest is taxable, and TDS at the statutory rate is deducted from the total interest paid. If form 15G/15H is completed and filed, no TDS will be deducted.
Who are eligible to open SCSS
(i) A person who is over the age of 60.
(ii) Retired Civilian Employees between the ages of 55 and 60, with the condition that the investment is made within one month of receiving retirement benefits.
(iii) Retired Defense Employees between the ages of 50 and 60, with the proviso that the investment be made within one month of receiving retirement benefits.
An account can be opened in one's own name or jointly with one's spouse. Only the first account holder is responsible for the entire deposit in a joint account.
Investors in small savings schemes like Senior citizen saving schemes will earn the same interest rate for the quarter ending March 31, 2022, as they did for the quarter ending December 31, 2021. New investments made into these schemes during the January-March 2022 quarter will earn the same interest rates as the previous quarter. For the next quarter, the government will announce the interest rate soon.
(Your legal guide on estate planning, inheritance, will and more.)
Download The Economic Times News App to get Daily Market Updates & Live Business News.
