Senior Citizen Savings Scheme account at NBFCs: rate of return and eligibility criteria

Business & Finance

SCSS (Senior Citizen Savings Scheme) is a government-sponsored savings instrument provided to Indian citizens aged 60 years and above. The scheme was launched back in 2004 to offer financial support to retirees by ensuring a steady flow of income. Till now, this flagship scheme has benefitted over 21.4 million Indians.

Benefits of SCSS

As Senior Citizen Savings Scheme is a government-backed program, the rate of returns has been set in tandem with the financial requirements of retirees. Here is a breakdown of the SCSS rate of return for the Financial Year 2018-19. 

  • The fourth quarter of 2018 to 2019 – 8.7%
  • The third quarter of 2018 to 2019 – 8.3%
  • The second quarter of 2018 to 2019 – 8.3%
  • The first quarter of 2018 to 2019 – 8.3%

Until the third quarter of the fiscal year 2018-19, the rate of return remained low as compared to the fourth quarter of the same year. 

The SCSS raked the highest returns during the fiscal year 2017-18, i.e. 9.3%. However, such cases are sporadic, and thus it seems more viable to invest in high-return investment avenues like fixed deposit. 

For instance, Bajaj Finance Fixed Deposit offers lucrative interests of up to 8.35% over flexible tenor as per your financial portfolio. Further, senior citizens enjoy an additional 0.35% over the standard interest rate. They can also choose between cumulative and non-cumulative options to accumulate a substantial corpus for future use or opt for periodic pay-outs to fund day-to-day expenses.   

Tax benefit under SCSS

Any investment made under Senior Citizen Savings Scheme is tax deductible under Section 80C of the Income Tax Act of 1961. However, as per the current rules, if you earn interest income of more than Rs. 50,000 from SCSS in a financial year, you are liable to pay tax deducted at source. 

Eligibility criteria 

To be a beneficiary of this flagship scheme, you need to meet the following eligibility requirements:

  • You must be an Indian resident. NRIs (Non-residential Indians) are not eligible for the SCSS. So, if NRIs are considering schemes to invest in to plan for post-retirement life, they can opt for fixed deposits instead by opening an NRE or NRO account.   
  • As Senior Citizen Savings Scheme caters only to the elderly (aged 60 years or above), individuals below that age limit cannot invest in that scheme. However, there are two exceptions to this rule –
  • Individuals aged between 55-60 years who have taken VRS (Voluntary Retirement Scheme) are eligible for this scheme.
  • Retired defence personnel are eligible for this scheme provided they meet all other criteria. 
  • You can avail this scheme with a minimum deposit of as low as Rs. 1,000. 

That being said, you can always invest in Bajaj Finance Fixed Deposit that offers up to 8.35% interest rate along with a host of other benefits such as:

  • Offer a higher return rate for senior citizens. 
  • Bajaj Finance Fixed Deposit is also guaranteed by the high stability and creditability ratings. 
  • You do not have to fall within any age bracket to invest in this scheme; make the most out of your employment years. 
  • Draw a loan against your deposited sum to meet monetary crunches.
  • Enjoy flexible tenor as per your liquidity needs and financial portfolio.

With Bajaj Finance Fixed Deposit, experience stability and high returns on your invested funds. Plus, with assured returns (immune to market volatility) and minimum deposit amount, it is one of the safest investment options to multiply your savings.      

Benefits of SCSS

There are several benefits linked to SCSS as well like: 

  • As it is a government-backed scheme, it offers assured returns and secured investment. 
  • It is easy to open, operate and transfer your SCSS account at any authorised financial institutions or post office across India.
  • SCSS also offers flexibility to extend the tenor to up to 3 years if the initial tenor is 5 years.  However, you can extend the tenor only once. 

With this information on the Senior Citizen Savings Scheme at your disposal, you can reap substantial benefits from this savings program. Also, you can opt for alternative investment avenues like fixed deposits that offers higher and assured returns.

Author Bio:

Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at HighlightStory

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