All You Need to Know About Senior Citizens’ Savings Scheme

By | May 31, 2012

In this era of awareness and adoption to new methods of investing, there is a certain section of the society who wishes to save and invest with the traditional methods. However these schemes can come handy and prove to be very efficient in terms of exposure to risk and returns for those investors who have retired and seek to receive nominal returns by investing in such traditional approaches. Investing in Post office monthly income scheme (Pomis), National Savings Certificate (NSS), Senior Citizens Savings Scheme (SCSS) are the avenues they are likely to remain in. In this article we will be looking into some of the facts that an individual needs to keep in mind when opting for a Senior Citizens Savings Scheme.

Savings’ instruments like the Post office monthly income scheme or the Senior Citizens Savings Scheme are preferred and suitable savings’ avenues for senior citizens. Under Post office monthly income scheme, there are options where an investor can open the account individually, jointly by two or three adults and even a minor, with the help of a guardian. In the case of Senior Citizens’ Savings Scheme (SCSS), an investor can open his/her account either individually or jointly where the partner should be the spouse.

A Senior Citizens’ Savings Scheme can be opened if you are 60 years old and the age of your spouse is not going to matter. He/she can be older or younger than this age. Reiterating, this is possible in case the Scheme is being purchased jointly and if you are the first account holder and are of 60 years of age. However, there are certain exemptions. If you retired on super annuation or are under a voluntary scheme, you are privileged to start investing Senior Citizens’ Savings Scheme from 55 years of age.

Opening a joint account in the Senior Citizens’ Savings Scheme enables the first account holder to have the right over the invested funds and no right is given to the spouse. The spouse does not enjoy any share in the funds into the Senior Citizens’ Savings Scheme in which your funds are invested.

However, you and your spouse are free to operate and open separate individual accounts and also have the privilege to hold the joint account. One must ensure that each individual’s account can hold a maximum of Rs15 lakh and the minimum deposit can be Rs 1000. The better you optimize your savings more are your chances of benefiting from high returns. Also, Senior Citizens’ Savings Scheme carries an interest rate of 9% p.a. This will benefit you with good returns in your post retirement life.

Coming to the aspect of nominations, you can have nominees even on your joint account. In case of a joint account, the first nomination will be your spouse who will be entitled to receive the entire amount in your Senior Citizens’ Savings Scheme joint account. Apart from the first nomination, you can nominate anyone near and dear as other nominees. They will be the rightful owner of the funds in Senior Citizens’ Savings Scheme joint account if a situation arises where the couples have become deceased.

It is always advised to nominate your nominees at the initial stage when you open your account however, you can also nominate them after that. Further, any changes relating to the nominations for example, adding nominees or cancelling any nominations on the Senior Citizens’ Savings Scheme joint account can be made easily. There is no need for you to pay for services in order to alter the nomination list.  Saving for the future always gives an added advantage to not depend on debt like a personal loan or a home loan to fulfill your requirements, especially during the initial phase of your retirement. It is definitely not something one desires.

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