6 Benefits Of Investing In A Senior Citizens Savings Scheme (SCSS)
Senior Citizens Savings Scheme (SCSS) provides guaranteed returns to individuals aged 60 and above. The scheme currently offers 8.2 per cent interest.
Senior Citizens Savings Scheme (SCSS) provides guaranteed returns to individuals aged 60 and above. The scheme currently offers 8.2 per cent interest.
SCSS
Senior Citizens Savings Scheme (SCSS) provides guaranteed interest income, currently 8.2 percent, to individuals aged 60 and above, for their financial security. The scheme was amended in November to enhance the benefits for account holders. Let’s explore the benefits of investing in SCSS as an account holder.
SCSS currently offers an 8.2 percent interest rate, the highest among all other small savings schemes. It carries zero risk since the government backs it. Compared to SCSS, the Public Provident Fund (PPF) offers 7.1 percent, the National Savings Certificate (NSC) gives 7.7 percent, and Kisan Vikas Patra (KVP) provides 7.5 percent. The rates are locked at the time of account opening, providing a guaranteed income for the entire five-year tenure. This is one of the best benefits of investing in SCSS.
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The scheme offers investors tax benefits up to Rs 1.5 lakh in a financial year under section 80C of the Income-tax Act, 1961. However, the interest paid quarterly is taxable in the hands of the account holder at the applicable tax slab rate.
It provides seniors with a regular cash flow after retirement, as it makes guaranteed quarterly interest payments. So, instead of a traditional bank fixed deposit (FD), an investor can choose SCSS to generate higher interest income.
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The subscriber can prematurely withdraw or close the account during a financial crisis. However, a penalty will be levied for premature withdrawal or account closure. If the account is closed within a year of opening, there will be a deduction of 1 percent.
The SCSS account is initially opened for five years; after that, it can be extended in blocks of three years. Thus, this guaranteed income scheme provides seniors with eight years of tension-free regular income. However, as per the recent changes in rules, the account can now be extended unlimited times. Each extension is for a block of three years.
The account can be opened with a minimum of Rs 1,000 and a maximum of Rs 30 lakh. One can open a single or joint account with a spouse. According to the latest changes, the spouse of a government employee can invest in the scheme if the dead employee is 50 years or older. SCSS can be opened with post offices and banks and is transferrable within their branches.
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Kotak Mahindra Bank and Shivalik Small Finance Bank revised their fixed deposit rates in the week ending October 28, 2023.
ICICI, Axis, IDBI, and RBL bankshave revised their fixed deposit rates this week, offering senior citizensa maximum of 8.60 per cent.
Public Provident Fund (PPF) is a long-term scheme for retirement with tax benefits. Historically, it provided more than 7.0 per cent returns annually
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