A lot of wealth, fear of losing it, wanting to earn decent returns & having it available just when needed, rightly defines the dilemma of a senior citizen. Senior Citizens have corpus from Pension funds available at hand in search of secured investment options. This is when the Senior Citizen Savings Scheme (SCSS) introduced by the Government in 2004 comes handy.

SCSS is a government backed scheme specially designed for senior citizens considering their needs with flow of income, capital protection & add on tax benefit. The current rate of interest is 7.4% p.a. (for Quarter July to September 2020). The lock-in period is of 5 years with a one time extension option for 3 years.

SCSS is suitable for resident individuals with more than 60 years of age. However, individuals aged 55 -60 years who have opted for Voluntary Retirement Scheme (VRS) or Superannuation are also eligible subject to the condition of investing within a month of receiving retirement benefits.

Also, retired defense personnel aged 50 years can take benefit of this scheme.

One can open an account with a minimum of ₹1000 & maximum of ₹15 Lakh p.a. (₹ 30 Lakh jointly with Spouse). Deposit can be made in cash & cheque mode. However, ₹1 Lakh & above no cash mode is accepted. One has the option of premature withdrawal but only after completion of 1 year subject to penalty.

Senior Citizens get tax benefit on the investment made upto ₹1.5 Lakh p.a. However, the interest is fully taxable. But,upto 50,000 of the interest earned on this scheme is eligible for tax deduction under section 80TTB. One also has the option to submit form 15H if the Interest on TDS does not exceed the slab rate with no other income available.

Fixed Deposit (FD), Pradhan Mantri Vaya Vandana Yojana (PMVVY), ELSS, NSC,etc are some of the investment alternatives for senior citizens. FD provides corpus safety with 0.25% to 0.50% additional interest over normal interest, which varies from bank to bank. However, for tax benefit the tenure has to be 5 years. PMVVY is a scheme offered by LIC with interest of 7.4% p.a. for the year 2020-21 but no tax benefit & higher lock in period of 10 years. NSC has a lock in of 5 years but with no regular stream of income & lower interest rate of 6.8% p.a. However, ELSS is a good alternative with high returns but it’s advisable to invest some portion of money & not the entire corpus as these are not assured returns.

 SCSS account can be opened with a list of public or private sector banks or with post offices all over India.

Either an individual or a joint (along with the spouse) account can be opened.

Sample list of documents required for account opening is as follows:

Documents required

Following is the list of the documents required for investing in the scheme:

(a) Duly filled application form, available at the post office hior bank

(b) Know Your Customer (KYC) form

(c) Photographs of the applicant/s

(d) Permanent Account Number (PAN)

(e) Address proof

(f) Age proof

(g) In the case of retirees, a certificate from the employer, stating the retirement was on superannuation or otherwise, retirement benefits, ..

At retirement one wants to be relaxed & enjoy. SCSS is one of preferred solutions with security & high returns letting one live in the moment!