Presentation on Senior Citizen Savings Scheme Post Office Term Deposit

BY Shreya Gautam

Senior Citizen Savings Scheme

The Senior Citizen Savings Scheme (or SCSS) is a deposit scheme specially meant for elderly citizens. A new avenue of investment and return for Senior Citizen.

It is meant for those who want a regular source of income in the later years of their life.

Salient features

Restrictions
The Senior Citizen Savings Scheme account can be opened only by individuals. It can not be opened by Non-Resident Indians (NRI), Persons of Indian Origin (PIO) and Hindu Undivided Families (HUF).

Source of Funds
For people between 55 and 60 years of age, the amount invested in SCSS has to come from their retirement benefits.

For persons over the age of 60 years, there is no restriction on the source of funds invested.

How to invest in the Senior Citizen Savings Scheme (SCSS)

A Senior Citizen Savings Scheme account can be opened at any designated post office throughout the country. The scheme can also be opened at the designated branches of the following public sector banks:

At present, 24 Nationalized banks and one private sector bank, as per list below, are authorized to handle the SCSS
1. State Bank of India 2. State Bank of Hyderabad 3. State Bank of Bikaner and Jaipur 4. State Bank of Patiala 5. State Bank of Mysore 6. State Bank of Travancore 7. Allahabad Bank 8. Andhra bank 9. Bank of Baroda 10. Bank of India 11. Bank of Maharashtra 12. Canara Bank 13. Central Bank of India 14. Corporation Bank 15. Dena Bank 16. Indian Bank 17. Indian Overseas Bank 18. Punjab National Bank 19. Syndicate Bank 20. UCO Bank 21. Union Bank of India 22. United Bank of India 23. Vijaya Bank 24. IDBI Bank

TOP FIVE SENIOR CITIZEN DEPOSIT SCHEMES IN INDIA

Bank Name
Indian Bank (1 yrs) ING Vysya Bank (1yrs) Tamilnadu Mercantile Bank (1 yrs) Yes Bank (1 yrs)

Interest Rate(%) Compounded Qtrly

10.00 10.00 10.10

What Rs. 10,000 will grow to

11,038 11,038 11,038

10.00

11038 11011 12196 12196

Central Bank Of India 9.75 (1 yrs) Bank of Maharashtra 10.50 (2 yrs) Lakshmi Vilas Bank (2 yrs) 10.50

Should you invest in Senior Citizen Savings Scheme (SCSS)?

High Interest Rate

The prevailing interest rates on bank fixed deposits at present (October 2012) are 5% 6% per annum. The Senior Citizen Savings Scheme is very popular with people, as it provided interest rates that was way above the average market rates.

With interest rates on FDs being as high as 9%-10% per annum (with an additional 0.5% for senior citizens), the interest offered on Senior Citizen Savings Scheme looks quite low.

Post Office Term Deposit

The Post Office Term Deposit (POTD) is similar to a bank fixed deposit, where you save money for a definite time period earning a guaranteed return through the tenure of the deposit. At the end of the deposits tenure; the maturity is made up of the capital deposited and the interest it earns. Time deposits can be made for a period of 1 year, 2 years, 3 years and 5 years

Once you have selected the post office to open the POTD account, you can open a POTD for which you will need the following documents:

How to Open an Account

deposit opening form witness signature declaration in form No 60 or 61 as per the IT Act

POTD

Once you have selected the post office to open the POTD account, you can open a POTD for which you will need the following documents:

Choose a nominee

identity proof for verification

 Any individual can open an account.

Trust, Regimental Fund or Welfare Fund not permissible to invest

Investments Minimum: Rs 200 and in multiples there of Maximum: There is no upper limit Interest rate of 8.20 per cent to 8.50 per cent depending on the tenure of the deposit. Interest is payable annually but calculated quarterly
Tenure is 1,2,3 or 5 years

Duration & Rate of interest of POTD

One year Two year Three year Five year 6.25% 6.50% 7.25% 7.50%

Income Tax Benefit on Time Deposit

Amount invested in 5years POTD, along with PPF/LIC/NSC/ULIP, etc. upto a maximum of Rs. 1,00,000 is eligible for deduction u/s 80C. In case of deposit under joint holding, deduction u/s 80C shall be available to the first holder.

Thank you