Retirement can be a scary thing. A person spends his or her entire life working and later wonders how to enjoy their twilight years. Many people think that at this phase in life, senior citizens have no role to play as far as investments are concerned, but that is not true.
A majority of the savings of a senior citizen are locked away in FDs or other forms of investment. While this is a safe mode of income via interest, it does not offer a lot of money and this is where schemes like the SCSS (senior citizen saving scheme) come into play. Apart from being tax deductible, the Senior Citizen Saving Scheme is an ultra-safe one backed by the government, making it an ideal option for retired taxpayers.
Features and Benefits of SBI Senior Citizen Saving Scheme
Some of the features and benefits of the Senior Citizen Saving Scheme of SBI bank are as follows-
- Interest on the Deposit – The SBI Senior Citizen Saving Scheme interest rate is 9.3 percent per annum
- Type of Deposit – You can make a deposit by cash (if the deposit amount is less than Rs.1 Lakh) or by demand draft (DD) or cheque
- Multiple Accounts – You can open more than one account as long as the total deposits in all of the accounts together does not exceed Rs.15 Lakhs collectively
- Nominees – You can have more than one nominee
- Joint Account – You can open a joint account with your spouse
- Extension – You can extend your SBI Senior Citizen Saving Scheme account for 3 years more after maturity
Eligibility Criteria for SBI Senior Citizen Saving Scheme
- Any individual -
- Who will be 60 years old and above on the account opening date
- Who is 55 years old and more but below 60 years, but has retired on the account opening date
- Who retired before these rules started and is 55 years old and above on the account opening date
- Who is a retired Defence Services personnel is eligible to open an account. Defence Services here does not include civilian Defence employees
- NRIs are not eligible
- A Hindu Undivided Family (HUF) is not eligible for opening an account
How to open a SBI Senior Citizen Saving Scheme Account
To open a Senior Citizen Saving Scheme Account with SBI bank, a depositor has to visit any deposit office and make an application in Form A. Along with this, he or she has to provide proof of age and deposit the amount in multiples of thousand. A person has the option of opening an individual account or a joint account with his or her spouse.
An individual can have more than one account, if the total deposits in all the accounts does not exceed Rs.15 Lakhs, which is the maximum limit. The deposits shall be limited to Rs.15 Lakhs or the retirement benefits (whichever is lower).
Deposits and Withdrawals
An individual can make one deposit in his or her SBI Senior Citizen Saving Scheme account. As mentioned above, this deposit has to be made in multiples of thousand and should not exceed Rs.15 Lakhs. He or she will be allowed to withdraw the money a year after opening the account along with a penalty.
Senior Citizen Saving Scheme Account Renewal
An individual can extend his or her Senior Citizen Saving Scheme account with SBI for 3 more years after the 5 years maturity period through an application made in Form B within 1 year after maturity date.
Senior Citizen Saving Scheme Nomination
An individual can nominate one or more people during account opening time or anytime after it has been opened but before it is closed. He or she can do so through an application on Form C, which has to be taken along with the passbook to the branch. This nomination can be varied or cancelled.
Senior Citizen Saving Scheme Account Maturity
The deposit office will pay the deposit amount after 5 years from the account opening date. This deposit will be paid when the depositor provides the passbook along with a written application on Form E. If the depositor fails to close the Senior Citizen Saving Scheme account with SBI on maturity and does not even extend it, then his or her account will be considered as matured. Post maturity, the account can be closed at any time and the depositor will have to pay the interest.
Senior Citizen Saving Scheme Depositor’s Death
In case the depositor passes away before maturity, his or her Senior Citizen Saving Scheme account will be closed and the deposit will be refunded along with the interest to the nominee. If there is no nominee, or if he or she has also passed away, then the refund will be made to the legal heir of the depositor.
If the total amount to be refunded is up to Rs.1 Lakh, then it will be paid to the legal heir when the person provides the following documents –
- Letter of indemnity
- Letter of disclaimer on affidavit
- A stamped paper containing the death certificate of the depositor
Senior Citizen Saving Scheme Premature Account Closure
When the depositor makes an application in Form E, then he or she may be allowed to withdraw the deposited funds and close the SBI Senior Citizen Saving Scheme account any time after 1 year from the account opening date provided the following conditions are followed –
- If the account is closed after 1 year from the opening date but before 2 years, the balance shall be paid to the depositor after a deduction of 1 and half percent of the deposit
- If the account is closed on or after 2 years from the opening date, the balance shall be paid to the depositor after a deduction of 1 percent of the deposit
Important SCSS Related Reads
- Senior Citizen Saving Scheme
- Andhra Bank Senior Citizens Savings Scheme
- Corporation Bank Senior Citizens Savings Scheme
- ICICI Bank Senior Citizen Saving Scheme
- PNB Senior Citizens Savings Scheme
- SBI Senior Citizen Saving Scheme
- Senior Citizen Savings Scheme Account
- Union Bank of India Senior Citizen Saving Scheme
- Senior Citizen Saving Schemes Interest Rate
- Senior Citizen Saving Schemes Rules
- Senior Citizen Saving Schemes Interest Calculator