Savings scheme for senior citizens

Senior citizens who have retired from active work life seek steady source of income to see them through their old age. For them, safety of capital is paramount as their risk-taking ability is very low in the absence of regular source of income.

The Senior Citizen Savings Scheme (SCSS) is one such scheme that offers highest safety of capital (since it is a Government of India scheme), regular income and decent interest rate to those above 60 years of age.

The minimum and maximum amount that can be invested in SCSS is Rs 1,000 and Rs 15 lakh, respectively, and the tenure of the scheme is 5 years. The rate of interest on SCSS is declared by the Ministry of Finance from time to time. Currently, the rate of interest offered on SCSS is 8.30%, which is credited to the bank account of the investor on a quarterly basis on January 1, April 1, July 1 and October 1 each year. The investor can extend the tenure of the SCSS deposit for a maximum period of three years after the maturity of the deposit.

The investment made under SCSS is eligible for deduction under Section 80C of the IT Act, subject to a maximum of Rs 1 lakh. The interest income earned in excess of Rs 10,000 per annum on investment in SCSS is liable to be taxed and deducted at source.

A senior citizen above the age of 60 can open the SCSS account in any post office or branch of scheduled commercial bank.