The PNB Senior Citizens Savings Scheme is available for individuals who are above 60 years of age. The depositors under this scheme can also choose to create a joint account along with their spouse, or avail the nomination facility available.
Retirement is something that brings doubts and different complications with itself. However, there are many savings products that offer guaranteed income after the retirement and provides a lot of safety. The SCSS (Senior Citizens Saving Scheme) was launched in the year 2004. This deposit scheme was introduced by the Government of India to offer returns that were guaranteed to all the senior citizens via an investment that is safe and secure. The Punjab National Bank Senior Citizens Savings Scheme ensures that the senior citizens avail a steady flow of income after their retirement.
Punjab National Bank SCSS Eligibility
The applicant must be a resident of India in order to open an account.
- Entry Age
The minimum age of the applicant must be 60 years. However, 55 year old applicants are also considered, who have opted for special or voluntary retirement or on superannuation. All the Defence Services retired personnel, excluding the civilian defence employees, are eligible for investing irrespective of age limits and are subject to fulfilment of the specified conditions.
- The minimum investment should be INR 1000
- The maximum investment should be INR 15 lakh
- The deposits that are made in the savings scheme should be in the multiples of INR 1000
- Interest Rates
The Punjab National Bank senior citizens savings Scheme interest rate is 7.4% per year. The interest for senior citizens savings scheme is computed quarterly. Also, the interest is completely taxable.
The tenure of the savings scheme offered by Punjab National Bank is 5 years. It can also be extended by three more years.
Categories of Account
- Individual accounts can be created
- The applicant can apply for a joint account with the spouse
The nomination facilities are also available with the Punjab National Bank Savings Scheme.
Guarantees for Interest
The rates of interest that are applicable for this saving scheme will be duly notified by the Reserve Bank of India / Ministry of Finance before the 1st of April of that particular year and is also aligned with the G-Sec rates of the similar maturity. At present, the rate of interest in the Senior Citizen Savings Scheme deposit is 7.4% per year that is computed on a quarterly basis.
There is a five year lock in period of the Senior Citizen Savings Scheme deposit but it is liquid. Generally, the liquidity is available as withdrawals and it is subject to penalties and conditions.
- If there is an event of premature closure of a particular savings scheme deposit account then penalties will be charged
- Facility of pledging deposits in Senior Citizen Savings Scheme account, in order to obtain the loans is not at all permitted as that would completely defeat the important purpose of the regular income
- The closure of the Senior Citizen Savings Scheme or the premature withdrawal of the entire account is only allowed only after a year from the day the account was started or opened. However, a penalty is charged for early closure or premature withdrawal. The rate of the penalty is dependent on the tenure of the amount that has been completed
- As penalty, 1.5% is deducted from the total deposit, in case the Senior Citizen Savings Scheme account is shut after the 1st year but before the 2nd year
- If the closure of the account after the 2nd year then a penalty of one percent is deducted from the whole savings deposit
Tax Implications from Senior Citizens Savings Scheme
The interest that is earned on the entire deposit amount is absolutely taxable. According to the ITR (Income Tax Rules) the tax is duly deducted at source. However, one can produce form 15G or 15H if the tax is not deductible. Showing these forms will lead to no deduction of taxes.