A new savings scheme called ‘Senior Citizens Savings Scheme’ has been notified with effect from August 2, 2004. The scheme was announced by the Government in the Budget 2004-05. The Scheme will be available initially through designated post offices.
The main features of the scheme are as follows:-
Citizens of 60 years of age and above are eligible to invest. Single or joint account (with spouse only) can be opened.
Citizens who have retired under a voluntary or a special voluntary retirement scheme and have attained the age of 55 years are also eligible, subject to specified conditions.
Deposits in multiples of Rs.1000 subject to a maximum of Rs.15 lakh will be allowed.
The deposit will carry an interest of 9% per annum (taxable).
The maturity period of the deposit will be five years, extendable by another three years.
Premature withdrawal after a period of one year will be allowed, subject to some deductions.
The investments in the scheme will be non-tradable and non-transferable. However, nomination facility will be available.
Non-Resident Indians and Hindu Undivided Families are not eligible to invest in the scheme.
The details of the Senior Citizens Savings Scheme Rules, 2004 may be accessed at Ministry of Finance website <finmin.nic.in>.