With about 100 overseas offices and a customer base of more than 131 million, the Bank of Baroda is one of the topmost financial service providers in India. Post its merger with the Dena Bank and Vijaya Bank in 2018, it became the country’s third-largest bank, after SBI and ICICI bank.
This bank offers its customers variegated products and services, of which the Bank of Baroda Senior Citizen Scheme is among the most popular. This can be owed to the multitude of benefits that this scheme offers to retired individuals.
Features of the Bank of Baroda Senior Citizens Savings Scheme
The Senior Citizen Savings Scheme is a government-sponsored investment instrument brought forth in 2004. It makes for a lucrative opportunity for senior citizens, above 60 years’ age, to generate steady returns over a stretch.
This scheme is a long-term saving option which includes multiple benefits. Few features of the scheme are –
- It is a safe and reliable investment option for senior citizens. There will be steady returns generated, and at the same time, there will be no risk to the deposit made.
- Minimum deposit amount is Rs.1000, while the maximum deposit is Rs.15 lakh.
- The process to open an account under Senior Citizen Savings Scheme is fairly simple and can be done through banks or post offices.
- Deposit tenure is 5 years, which may be extended by another 3 years.
- The returns generated are high compared to regular savings or a fixed deposit account.
Present Rate of Interest Offered by Bank of Baroda
As of September 13th, 2020, the rate of interest for Senior Citizen Savings Scheme is 7.4% for the second quarter (July to September 2020) of the financial year 2020-2021.
This interest rate is reviewed on a quarterly basis by the Ministry of Finance and is subject to change. The accrued interest on the SCSS deposits is credited quarterly.
Following is a table illustrating the rate of interest offered under this savings scheme over the past few quarters –
|Quarters||Rate of Interest|
|(FY 2020-21 Q2) July to September||7.4%|
|(FY 2020-21 Q1) April to June||7.4%|
|(FY 2019-20 Q4) January to March||8.6%|
|(FY 2019-20 Q3) October to December||8.6%|
|(FY 2019-20 Q2) July to September||8.6%|
|(FY 2019-20 Q1) April to June||8.7%|
|(FY 2018-19 Q4) January to March||8.7%|
|(FY 2018-19 Q3) October to December||8.7%|
|(FY 2018-19 Q2) July to September||8.3%|
|(FY 2018-19 Q1) April to June||8.3%|
It should be noted in this regard that, throughout the deposit tenure, i.e., 5 years, applicable interest will be the one which was prevailing during the time of deposit.
For example, if a deposit is made under SCSS in September 2020, 7.4% interest rate will be applicable until September 2025. If it is extended by another 3 years, i.e., till September 2028, the interest rate will be computed according to the prevailing rate at the time of renewal.
Eligibility to Avail the Benefits Under Bank of Baroda SCSS
Individuals belonging to the categories below can opt for the benefits of SCSS –
- Individuals aged 60 years or above.
- Individuals within 55-60 years who have opted for voluntary retirement service (VRS) or superannuation.
- Retired personnel of defence services which have attained the age of 50 years.
Non-Resident Indians and members of the HUF cannot invest under the Senior Citizen Savings Scheme Bank of Baroda.
Taxability of Senior Citizen Saving Scheme
Depositors under Bank of Baroda Senior Citizen Saving Scheme can claim an exemption under Section 80C of the Income Tax Act, 1961 up to a limit of Rs.1.5 lakh in a year.
TDS (Tax Deducted at Source) is applicable if the interest earned through the scheme is above Rs.50,000 in a financial year. The interest generated under this scheme will be included in the accountholder’s annual income for the purpose of tax computation.
Comparison between SCSS Bank of Baroda and Fixed Deposit
The below-mentioned table indicates the differences between Bank of Baroda Senior Citizen Scheme and that of its fixed deposit scheme.
|Senior Citizen Savings Scheme||Fixed Deposit of Bank of Baroda (for senior citizen)|
|Rate of Interest
(as on September 13th, 2020)
|7.4% (July to September 2020)||Ranges between 3.40% and 6.30%|
|Maturity Period||5 years||Ranges from 7 days to 10 years.|
|Tax Benefit (On Returns)||Taxable||Taxable|
|Tax Benefit (On Investment)||Applicable||Applicable|
|Premature withdrawal||After 1 year (1.5% charge)||1.5% on applicable interest rate|
How to Apply for the Bank of Baroda SCSS?
An account of Bank of Baroda Senior Citizen Scheme can be opened using both online and offline modes.
Form A may either be downloaded from the official website of Bank of Baroda or obtained from any of the branches. This Form will have to be duly filled up to open the account. It will then have to be submitted along with supporting documents –
- Address proof (such as Aadhar card)
- Identity proof (such as PAN card)
- Age proof (such as birth certificate or passport)
- Passport size photographs
These documents will have to be self-attested before submitting to open an account of SCSS in Bank of Baroda. Upon fulfilling these formalities, individuals can open their accounts under this scheme to avail guaranteed returns. This way, senior citizens can maintain a steady flow of income throughout the scheme tenure.