The government -backed, Senior Citizen Saving Scheme (SCSS) gives a regular income with tax benefits to the senior citizens of India. It is a low-risk scheme and is available to the elderly in all the banks and post offices in India.
The interest rates for this scheme are 7.47% for three months, open to people aged 60 years or above.
The SCSS is also open to people who retired under the Voluntary retirement Scheme (VRS) in superannuation in the age bracket of 55 and 60 years.
Individuals can apply in the SCSS if only the source of investment is retire benefits within a month of receiving them. The exception was made by the Finance Ministry on 26th May, 2020 to do away with the one-month clause for those people who retired in the lockdown period of COVID-19.
The SCSS matures in 5 years and can be extended another 3 years of the application in the prescribed format is submitted within one years of maturity. The account can be closed without any deduction at any time after the expiry of one-year extension.
The maximum amount of money that can be deposited in this scheme is 15 lakh rupees. A person can open more than one account in his name or with the name of his spouse, but the limit is 15 lakh rupees after adding the balance in all accounts. But the interest can be doubled by using joint deposits with a spouse. In case of joint account, the limit is 30 lakh rupees.
If a senior citizen invests 15 lakh rupees for 5 years at the present rate of interest, then his quarterly interest would come up to 27750 rupees and it would be 111000 in a year. When the scheme matures, then the total interest earned on the investment would be 555000 rupees. The total amount which a person can get at maturity is 2055000.
And in case of a joint deposit of 30 lakh rupees, the scheme yields a sum of 2.2 lakh rupees per year as interest.
