Senior Citizens Savings Scheme (SCSS)
SCSS offered by India Post is open to senior citizens 60 years of age and above. It also allows individuals who are 55 or above, who have opted for VRS or superannuation to park their retirement proceeds. To be eligible before 60, you need to open your SCSS account within one month of receiving your retirement benefits. The SCSS is again a Government of India guaranteed scheme, which makes it safer than even bank deposits.
Interest rates on the SCSS are reset at the beginning of every quarter by the Government of India. The scheme accepts a minimum of Rs 1000 and allows an individual to invest a maximum of Rs 15 lakh over his or her lifetime. Joint accounts are permitted where both husband and wife are senior citizens, and the maximum amount you can park in such accounts is Rs 30 lakh. SCSS carries a 5-year maturity with interest payouts at quarterly intervals. The interest is credited into savings accounts maintained with the post office. The scheme does not offer monthly payout, annual payout or cumulative options. It allows early exit after one year with a penalty of 1.5 per cent and after two years, with a penalty of 1 per cent.
While the initial investment is eligible for tax exemptions under section 80C upto Rs 1.5 lakh, the interest is taxable and subject to TDS beyond Rs 10,000 per year.
