With high returns, Senior Citizens Savings Scheme (SCSS) is the simplest investment options for those who are above the age of 60. Designed to benefit the senior citizens, the scheme was launched in 2004. 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.

Eligibility: 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.

Minimum amount: One can open an account under this scheme with a minimum deposit of 1,000. The limit can go up to 15 lakh. The deposit in the account should be in the multiples of 1,000. Other than the individual accounts, banks also provide the option of opening accounts jointly with the spouse under the Senior Citizens Savings Scheme.

Interest rate: 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 July to September quarter, 2019. Finance Ministry review the interest rate in every quarter. Interests are paid on a quarterly basis — the first working day of April, July, October and January.

Maturity: Accounts opened under Senior Citizens Savings Scheme has a tenure of five years. One can extend the account for another three years after it matures.

Premature closure: 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.

Tax-saving scheme: Investments of up to 1.5 lakh is eligible for deduction under section 80C of the Income Tax Act. However, interest earned from the scheme is fully taxable. In case, the interest earned is more than 40,000 in a financial year, tax deducted at source (TDS) is applicable to the interest earned.

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