Post Office Savings Scheme for Senior Citizens
For all senior citizens, Post Office offers two schemes – the first one is Senior Citizen Savings Scheme (SCSS) while the other the Post Office Monthly Income Scheme (POMIS). Senior Citizen Savings Scheme (SCSS) is a five year scheme which came into being in the second half of 2004. This scheme provides capital gains to senior citizens @ 9.3 percent per annum which is quite attractive.
Post Office Senior Citizens Savings Scheme should form a part of your portfolio as it gives you sure and secured returns and that too at attractive interest rates. Tax deduction comes handy. Even the minimum amount is quite manageable - you need to make a min investment of Rs 1000, which seems in reach.
Features of Post Office Savings Scheme for Senior Citizens
- Age should be 60 years or more, and between 55 years to 60 years for individuals who have retired under a Voluntary Retirement Scheme or a Special Voluntary Retirement Scheme on the date of opening of the account within three months from the date of retirement.
- Interest @ 9.3% per annum from the date of deposit on quarterly basis w.e.f. 01.04.2012
- The Maturity period of this scheme is 5 years and can be extended for a further period of 3 years.
- The Minimum amount that can be deposited in this scheme is Rs 1000 and multiples thereof
- The Maximum amount that you can put in this scheme is Rs15 lakhs.
- The account may be opened in your name as well as in joint names with your spouse.
- Investment up to Rs 1,00,000/- per annum qualifies for Income Tax Rebate under section 80C of IT Act.
- No withdrawal permitted before the expiry of a period of 5 years from the date of opening of the account.
- TDS is deducted at source on interest if the interest amount is more than Rs 10,000/- per annum.
- Interest can be automatically credited to savings account provided both the accounts stand in the same post office.
- Premature closure is allowed after one year on deduction of 1.5% of the deposit and after 2 years on deduction of 1%. You may opt for premature closure after three years without any charge.
- Nomination facility is available under the scheme.
- Non-resident Indians (NRIs) and Hindu Undivided Family (HUF) are not eligible to open an account.
- No age limit for the retired personnel of Defence services provided they fulfill other specified conditions.
- Pan Card or/and if Pan is not allotted than copy of receipted application form for allotment of PAN.
- Certificate from the employer as per sub-clause (ii) of clause (d) of rule 2.
- Pay-in-Slip (Form-D) - duly filled and clearly mentioning the amount of deposit.
- Age Proof – Self f attested copies of any of the following documents can be attached as age proof
Note: You will be required to carry all the original documents for verification at the time of opening the account.
While planning your portfolio, apart from SCSS you may also try your hands on another scheme of post office which is also a secured investment option - Post office Monthly Income Scheme (POMIS).
Post of Monthly Income Scheme (POMIS) offers decent and safe capital gains. This scheme may be an ideal choice for you if you are looking for a monthly income after your retirement. This scheme is secure and risk free and ensures guaranteed return.
In this scheme you are required to investment a minimum of Rs 1500 or in multiple thereafter. You can hold maximum amount up to Rs. 4.50 lakhs and in case of a joint account Rs.9 lakhs is permissible.
The interest rate that you receive is @ 8.5 percent per annum payable w.e.f 01.12.2011. There is no tax rebate and tax deduction at source is also not applicable. Deposits are also exempt from wealth tax.
If you wish to open an account in name of POMIS than this could be done in individual name or jointly in name of your spouse or three adults jointly, and even a minor can get enrolled in this scheme through a guardian.
In order to enhance your returns along with SCSS you may also go for POMIS and combine the returns from your POMIS with a recurring deposit. This would surely help you in churning extra capital gains for yourself and your family.