Benefits of the Senior Citizen Savings Scheme

Brent K. Garrett
Posted by Brent K. Garrett February 20, 2023

The SBI Senior Citizen Savings Scheme (SCSS) is a government-backed savings scheme designed for senior citizens in India. It is an attractive investment option for those who are retired and looking for a regular source of income. In this article, we will discuss the features, benefits, and eligibility criteria of the Senior Citizen Savings Scheme.

Features of the Senior Citizen Savings Scheme

The SBI Senior Citizen Savings Scheme is a five-year savings scheme that can be extended for an additional three years. It offers an attractive interest rate that is higher than most fixed deposits. Currently, the interest rate is 7.4% per annum, which is compounded quarterly. The minimum investment amount in the scheme is Rs. 1,000, and the maximum investment amount is Rs. 15 lakhs. Investors can make multiple deposits in multiples of Rs. 1,000. The interest earned from the scheme is taxable, but it is exempt up to Rs. 50,000 per year under Section 80TTB of the Income Tax Act.

Benefits of the Senior Citizen Savings Scheme

  • Regular income: The Senior Citizen Savings Scheme offers a regular source of income to retirees. The interest earned on the scheme is paid out on a quarterly basis, which provides a steady flow of income to investors which was done on the site – Digital Seva Portal.
  • Attractive interest rates: The interest rate offered by the scheme is higher than most fixed deposits, which makes it an attractive investment option for senior citizens who are looking for a steady source of income.
  • Safe investment: The SBI Senior Citizen Savings Scheme is a government-backed savings scheme, which makes it a safe investment option for senior citizens. The investment amount is guaranteed, and the interest earned is also secure.
  • Easy accessibility: The scheme is available at most post offices and designated banks across the country, which makes it easily accessible for senior citizens.

Eligibility Criteria for Senior Citizen Savings Scheme

  • Age: The Senior Citizen Savings Scheme is open to senior citizens who are 60 years of age or older.
  • Citizenship: The scheme is available only to Indian citizens or those who have acquired citizenship through naturalization.
  • Investments: The minimum investment amount in the scheme is Rs. 1,000, and the maximum investment amount is Rs. 15 lakhs.
  • Tenure: The tenure of the scheme is five years, which can be extended for an additional three years.
  • Joint Accounts: The scheme allows joint accounts with spouses, but only the first account holder is eligible for tax benefits. You can check the same on the Digital Seva Portal.

Conclusion

The SBI Senior Citizen Savings Scheme is an attractive investment option for senior citizens in India. It offers a regular source of income, attractive interest rates, and is a safe investment option. However, it is important to note that the interest earned on the scheme is taxable, and the investment amount is locked in for a period of five years. Investors must carefully consider these factors before investing in the scheme. Overall, the Senior Citizen Savings Scheme is an excellent investment option for senior citizens who are looking for a steady source of income and a safe investment option. It is important to consult with a financial advisor before investing in the scheme to determine if it is the right option for your financial goals and needs.