A senior citizen (individuals aged above 60 years) or retired individuals aged above 55 years can open an senior citizen savings scheme (SCSS) with any bank or post office. At present SCSS offers an interest of 8.2% per annum and maximum Rs 30 lakh or the amount of retirement benefit, whichever is lower can be deposited into the scheme.
The government-backed Senior Citizen Savings Scheme (SCSS) is one of the most preferred investment options among retirees. For investments made in the October-December quarter, the Senior Citizen Savings Scheme offers an interest rate of 8.2% per annum. Individuals can invest up to Rs 30 lakh in an SCSS account. Is it possible to open multiple SCSS accounts within the Rs 30-lakh limit? Let’s find out.
Who can invest in the Senior Citizen Savings Scheme?
Anyone aged 60 and above can invest in this scheme. Retired individuals aged above 55 years but below 60 years can also opt for this scheme if they invest within a month of receiving retirement benefits. It has a five-year tenure, but it can be further extended by three years on maturity.
Can a senior citizen open multiple SCSS accounts?
“A depositor may operate more than one (SCSS) account subject to certain rules and regulations,” said the State Bank of India (SBI) in a frequently asked question (FAQ) about SCSS.
“You’re allowed to open and operate multiple SCSS accounts across banks and post offices. However, the combined value of the investments held across these accounts cannot exceed the overall SCSS investment limit,” says Pankaj Bansal, CBO, BankBazaar.com, a banking information website.
Both the spouses can open a single account and joint accounts with each other, as per SBI FAQ. The whole amount of deposit in a joint account will be attributable to the first account holder only, the bank said.
According to an SCSS FAQ by the Bank of India (BOI), “A depositor may open more than one account under SCSS subject to the condition that the deposits in all accounts taken together shall not exceed the maximum limit….”
This means that although a senior citizen can open multiple SCSS accounts across banks and post offices, the aggregate limit in all of these multiple SCSS accounts shall be Rs 30 lakh or the amount received as retirement benefit, whichever is lower. This limit must not be exceeded.
How to open an SCSS account
Senior citizens can open SCSS accounts at any bank or post office branch by filling up an application form- FORM-A. This application form along with FORM-D which is a pay-in-slip must be submitted along with age proof of the senior citizen, according to an FAQ about SCSS by the SBI.
Do keep in mind that once invested, the interest rate remains fixed for the duration of the SCSS i.e., 5 years. The interest is payable every quarter and fully taxable. The scheme does not provide any interest on maturity. If the interest payable every quarter is not claimed by an account holder, such interest shall not earn additional interest, as per SBI website. However, if an investor extends the scheme after maturity, he or she will earn interest according to the interest rate applicable for the scheme.
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