A senior citizen saving scheme is a program introduced by the government to provide retirement benefits for older people so that they do not have to be dependent on others for their necessities. The main objective of this scheme is to make sure of the regular income flow after a person retires from his working profession. Older people aged 60 years or above or who have opted for the VRS are eligible for investing in this scheme.
The opening of a senior citizen account can be done with a minimal amount of Rs 1000. However, the senior citizen saving scheme has a maximum limit of Rs 15 Lakh for any old-aged person. You can rely on the ensured regular income flow from this scheme as the government of India backs it. But one has to make sure that he invests in this scheme from a reputed and well-known bank or a post office of India.
This scheme provides the highest benefits and also provides the old citizens with tax-saving benefits. Older people can invest in these schemes in lump sum amounts either as an individual or can join others and enjoy the benefits of a regular flow of income. The ultimate benefits of the scheme are:
For enjoying the benefits of the senior citizen saving schemes, one has to open an account for the purpose. They can open the account with a lump sum amount collectively with others or enjoy the benefits alone. They don't have to worry about an ensured outcome as the Government of India backs it.
However, you are limited to opening only a single account as a single person. You cannot open multiple accounts in the same branch of the bank or the post office. If a person has access to several accounts, he is prohibited to the collective use of all those accounts with their maximum limit, Rs 15 lakh.
The opening of a senior citizen account requires minimal causalities. These accounts can be opened in your nearest banks and post offices. But make sure to visit a reputed and well-known institution.
The first thing required in opening a senior citizen saving account is the verified documents like an adhaar card, PAN card, or any other identity proof along with the KYC documents. Fill an application along with the above documents to finish the first step. You have to submit both the original and copies of the required documents.
The second step includes the submitting of the required amount, which may vary in different branches. Generally, the amount that needs to be deposited is Rs 1000, but it can vary if you add other participants to the account and enjoy a collective advantage. You can then add the names of your nominees for the account.
Follow the above steps to open a senior citizen saving account of your own. But make sure that you are 60 years in age or above.
The senior citizen saving scheme comes with a quarterly revision of its interest rates. These rates can either be in the interest of the account holders or the government, as they can be increased or decreased from time to time. The revision of the interest rate can vary due to various factors like the market rates, inflation level, deflation level, and other factors that affect the level of the economy. The stagnant economic rates can lead to no changes in the interest rates.
To open an account in the senior citizen saving scheme, every candidate has to make a minimal deposit of Rs 1000. The deposit limit can vary according to the number of individuals participating together to enjoy the benefits of this scheme. Then the amount of retirement benefit is fixed according to the deposited amount or the regular amount of Rs 15 lakh. The choice of money deposit lies with the account holder. They can deposit an amount that does not exceed Rs 1 lakh. The amount above Rs 1 lakh has to be paid through cheques.
The senior citizen saving scheme consists of a maturity period of 5 years. Many individuals might need to extend the scheme period, for which they need to go for the filling of Form B. The filling of form B will help him get an extended period of 3 years which gives the total period of 8 years for the scheme. However, the account holder is provided with this benefit only once.
The account holder of a senior citizen saving account is provided with the benefits of premature withdrawals once he completes a year of holding this account. There are no charges incurred in the premature withdrawal by an individual.
However, the account holder undergoes some changes in the form of deducted amounts from their deposited money. These charges vary according to the period of opening of the saving account. If the account holder closes his account before two years, he will undergo the amount deduction of 1.5 % as a penalty fine. Whereas if he closes his account after two years, he will only undergo a cash deduction of 1% as a penalty.
Under the senior citizen saving scheme, the individual can register the name of a nominee when opening their account. This helps in the transfer of the account holder's money after their death to the nominee. The nominee can be any family member, friend, business partner, or another person of any age—the nominee will receive the due amount until the maturity of the saving account.
Overall, we can say that investing in a senior citizen saving scheme can be beneficial in providing an assured investment return. It can help you save your taxes and provides you with an attractive scheme of interest rates that are revised quarterly.
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