Corporation Bank Senior Citizen Savings Scheme

Established in 1906, the Corporation Bank is a Mangalore based public sector banking unit, with pan-India presence. In 2020, it merged with Andhra Bank into the Union Bank of India to become the 5th largest public-sector bank in the country.

Among the range of financial products that it offers, Corporation Bank provides individuals above 60 years of age the benefits of a saving scheme. This government-backed Corporation Bank Senior Citizen Scheme has been framed keeping in mind the unique requirements of individuals who have retired, without any steady source of income.

The interest rate of this scheme is comparatively higher than other similar investment options, guaranteeing higher returns, and at the same time, sans risk to the deposited amount.

Features of the Corporation Bank SCSS

Here are certain features of the Corporation Bank Senior Citizen Scheme–

• The minimum deposit is Rs.1000 and the limit goes up to Rs.15 lakh.
• The term of maturity is 5 years, which can be further extended by another 3 years.
• Nominations can be made in favour of more than one person.
• Premature withdrawal is allowed in lieu of a charge.
• More than one account can be opened either on individual capacity or jointly.

Current Rate of Interest Offered by Corporation Bank SCSS

The present rate of interest under the Senior Citizen Savings Scheme is 7.4%. The rate is subject to review and announced before every quarter by the Ministry of Finance.

Following is a table illustrating the historic interest rates offered under this scheme –

The rate of interest is announced for every quarter, and it may be subject to change. The interest rate prevalent when this deposit is made will continue throughout the entire duration of its tenure, that is, the next 5 years.

However, if the term of Corporation Bank Senior Citizen Savings Scheme is extended by another 3 years, the applicable rate of interest will be the one which will be prevalent during the time of scheme renewal.

Eligibility to Avail the Benefits of Corporation Bank SCSS

Only those individuals who will meet these following eligibility criteria can open an account under Corporation Bank Senior Citizen Scheme–

• An individual must have attained 60 years of age.
• Individuals who are less than 60 years but more than 55 years and have retired on superannuation or voluntary retirement scheme (VRS).

(Provided the account is opened within the first month of receiving retirement benefits and the deposit does not exceed the entire corpus of the same)

• Individuals who retired from defence services and have attained 50 years of age.

(Civilian defence employees are excluded)

Members of the HUF, NRIs and POIs cannot, however, opt for the benefits offered under this scheme.

Taxability of Senior Citizen Saving Scheme

The interest earned on the deposit amount under through Corporation Bank Senior Citizen Interest rates is fully taxable. At the same time, the deposit qualifies for tax benefits under Section 80C of the Income Tax Act, 1961.

If the interest earned through this scheme exceeds Rs.50,000 in a financial year, TDS (Tax Deducted from Source) will be applicable. In terms of investment, tax deduction can be claimed till Rs.1.5 lakh under Section 80C of the IT Act, 1961.

Comparison between Senior Citizen Saving Scheme and Fixed Deposit 

Here is a comparison between various parameters of this Scheme such as Corporation Bank SCSS interest rate and the Fixed Deposit options offered by Corporation Bank –

How to Apply for the Corporation Bank SCSS?

To open the account under Corporation Bank Senior Citizen Scheme, Form A can be downloaded online from the bank’s official website or may be taken from any of the branches.

This Form will have to be fully filled up with the required particulars, for instance, with the applicant’s name, nominee details etc. Form A will have to be submitted along with supporting documents which should be self-attested.

A few documents that will have to be submitted include –

(1) Identity proof such as passport or PAN card

(2) Address proof such as Aadhaar card

(3) Age proof such as birth certificate

(4) passport size photographs.

Thus, the process to open such an account is pretty straightforward, given the applicant has gathered all the documents required. Nonetheless, individuals opting for this scheme should gather adequate information on the investment terms to compute their returns receivable accurately.

Note: Corporation Bank is now merged with Union Bank of India.