India Post or Department of Posts, which operates the country’s postal system, also offers nine savings plans with different interest rates. One of these savings programs offered by India Post is the Senior Citizen Savings Scheme (SCSS). The interest rates applicable to these schemes are currently reviewed quarterly by the Ministry of Finance.
Here is the essential to know about the postal senior savings plan (SCSS):
A person 60 years of age or over can open an SCSS account. In addition, if anyone aged 55 or over but under the age of 60, and who has retired with a retirement pension or under VRS (Voluntary Retirement Scheme) can also open the account under certain conditions.
India Post is currently offering interest at the rate of 7.4% on investment in SCSS at designated branches of post offices.
The minimum amount required to open the SCSS account is Rs 1,000, while the maximum amount should not exceed Rs 15 lakh. The account can be opened in cash if the amount is less than Rs 1 lakh. However, if the amount is Rs. 1 lakh or more, you need to deposit a check.
The maturity period of SCSS is five years. After maturity, the account can be extended for a further three years within one year of maturity by submitting an application in the prescribed format. In such cases, the account can be closed at any time after the expiration of one year extension without any deduction.
Investments under the scheme are also eligible for the tax benefit under section 80C of the Income Tax Act.
Early closing is permitted after one year, subject to deduction of an amount equal to 1.5 percent of the deposit. After two years, one percent of the deposit is deducted.