Senior Citizens Savings Scheme is the simplest investment options for those who are above the age of 60. Launched in 2004, the Senior Citizens Savings Scheme aims to benefit the senior citizen. The scheme is available through several public and private sector banks and India Post offices. Senior Citizens Savings Scheme offers an interest rate of 8.6% per annum for July to September 2019 quarter.
Any individual who is 60 or above the age of 60 can avail the benefits of Senior Citizens Savings Scheme. Those who have attained the age of 55 years or more but less than 60 years can also open their accounts under this scheme if they have opted for voluntary retirement. Defence personnel who are above the age 50 can also avail this benefit.
Among the various small savings scheme, Senior Citizens Savings Scheme offers the highest rate of interest. Currently, the interest rate is set at 8.6% for October to December quarter, 2019. The tenure of accounts under Senior Citizens Savings has a tenure of five years. The accounts can be extended for another three years after it matures.
In case anyone closes the account after one year and before the completion of two years, 1.5% of the deposit shall be deducted as penalty. If the account is closed after two years, 1% penalty will be charged.
TDS is deducted at source on interest from Senior Citizen Savings Scheme if the interest amount is more than ₹10,000 per annum. Investment under this scheme however qualifies for the benefit of Section 80C of the Income Tax Act, 1961. Under Section 80TTB, senior citizens can claim deduction up to ₹50,000 on interest earned from deposits.