Senior Citizens Fixed Deposit Scheme

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UAR Nidhi Senior Citizens Fixed Deposit Scheme

This is the well known deposit scheme offers to the citizen’s retirement amount.

Introduced in 2004 by the Government of India, the Senior Citizens Saving Scheme (SCSS) offers a steady stream of income for individuals over 60 years old. As it is a government-backed scheme, there is minimal risk associated with SCSS. Individuals can apply for this scheme in post offices and public and private banks.

What is SCSS?

As the name suggests, the Senior Citizens’ Saving Scheme is a retirement benefit programme by the Government of India. Individuals over 60 years can opt for the SCSS scheme by investing by making an individual or joint investment. In addition, this scheme provides tax benefits.

In SCSS, the instalment amount ranges between ₹50,000 and ₹15 lakhs. This amount is constricted to the retirement benefits. One must deposit it in the Senior Citizen Scheme account within a month from receiving retirement benefits from his/her employer.

Moreover, if an individual deposits more than the given amount, the additional funds get refunded to the account holder. One can extend the scheme for 3 more years from its date of maturity.

Features of the Senior Citizens Saving Scheme

The SCSS interest rate is modified once in every 3 months. Therefore, this rate of interest is subject to revision 4 times in a year.
The returns on this scheme are issued as it is a government-backed instrument. Moreover, contrary to market-linked investments, which are subject to fluctuations, SCSS is safe and offers assured returns to individuals.
SCSS comes with a maturity period of 5 years. That said, one can extend the scheme for another 3 years by submitting a duly filled-up Form B. Nonetheless, in this regard, the interest rate as per the quarter is levied.
Individuals can deposit a minimum of ₹ 1,000 to open their accounts. Moreover, one can deposit ₹ 15 lakh or the amount of retirement benefit, whichever is lower.
Deductions are made against premature withdrawals. If closed before a period of 2 years, 1.5% deduction will be made as a penalty. Furthermore, if closed after 2 years, 1% is deducted. However, for extended accounts, one can withdraw funds post one year without attracting penalties.
One can expect quarterly disbursements against the deposited amount. The interest gets credited to the account on the 1st of April, July, October, and January.
The account holder can register a nominee to the Senior Citizens Saving Scheme. So, if the account holder passes away before maturity, the nominee will receive the due amount.

Eligibility

Individuals have to be 60 years old or above.
Applicants with Voluntary retirement Scheme (VRS) within an age limit of 55 to 60 years.
Retired defence personnel above 50 years of age and below 60 years.
Furthermore, NRIs and HUFs are not eligible for this scheme.