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Home > Business > Business Headline > Personal Finance


All about senior citizens savings scheme

August 20, 2004 07:13 IST

Who can apply
The scheme is available for citizens above 60 years of age; however a provision has been put in place for individuals who have crossed 55 years of age. Such individuals may invest subject to the conditions that,
  • The person has retired under a voluntary retirement scheme or a special voluntary retirement scheme on the date of making the investment,

  • The investment is made within three months of the date of retirement,

  • And a certificate from the employer, indicating the fact of retirement, retirement benefits, along with period of such employment with the employer, is attached with the application form.

Non-Resident Indians and Hindu Undivided Families are not permitted to invest in the scheme.

  • Investment Limits
    Investments can be made in any post-office by opening an account. Only one deposit can be made in each account; the deposit amount shall be a multiple of Rs 1,000 and should not exceed Rs 1,500,000.

    A depositor can operate more than one account subject to the condition that all the deposits taken together don't exceed the specified amount i.e. Rs 1,500,000. Also more than one account shall not be opened in the same post-office during a calendar month.

  • Interest rate
    The scheme will offer an interest of 9 per centper annum. The same will be payable on 31st March, 30th June, 30th September and 31st December each year.

  • Mode of holding
    The depositor can hold an account either individually or jointly with his/ her spouse.

  • Nomination
    Nomination facility has been provided under the scheme. In the event of death of the depositor, the amount due shall be paid to the nominee. Nomination facility is also available incase of joint accounts.

  • Maturity
    The scheme has a tenure of 5 years. The account can be extended for a 3 year period by making an application.

  • Withdrawals
    Investors will be permitted to prematurely liquidate their investments at any time after the expiry of 1 year from the date of opening of the account subject to the following conditions,
    • In case the account is closed after the expiry of 1 year but before the expiry of 2 years from the date of opening of the account, an amount equal to 1.5% of the deposit shall be deducted.

    • In case the account is closed on or after the expiry of 2 years from the date of opening of the account, an amount equal to 1% of the deposit shall be deducted.

  • Tax benefits
    The interest income from the scheme is fully taxable.

  • Transfer of Account
    The account can be transferred from one post-office to another.



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    Read what others have to say:


    Number of User Comments: 7




    Sub: Senior citizen saving plan

    It is really rediculous to put a clause for VRS opties to open an account within 3 months of retirement.Most of the Voluntary Retirement has ...


    Posted by s.k.jadhav





    Sub: Clarifications on Senior Citizens\' Savings Plan

    Thanks for this highly informative article. The article states that the Senior Citizen's Saving Plan can be held jointly by the senior citizen and his/her ...


    Posted by Hanmantha Reddy





    Sub: Seniot citizens savings plan

    The one clause in the scheme that the account shall be opened within three months of taking VRS, is very harsh on those VRS optees ...


    Posted by Manakkal J.Raman





    Sub: injustice to person under VRS

    Dear Sirs, This scheme is totally injust to the person who is already on VRS. In government job one has a choice to accept VRS ...


    Posted by O.G.Vanani





    Sub: Senior citizen scheme

    As far as small saving scheme is concerned there is no TDS in any scheme because they small investor scheme and it has its limit


    Posted by Rashmikant




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