ICICI Bank, headquartered in Mumbai, was established initially for the purpose of extending industrial credit. However, in the year 1994, it started offering diverse financial services. It is now considered to be among the ‘Big Four’ banks in the country.
Among its financial products, the government-backed Senior Citizen Savings Scheme ICICI bank offers retired individuals a chance to alleviate financial troubles even in the absence of a steady source of income. Under this scheme, there is hardly any risk to the capital invested alongside an assurance of guaranteed returns.
Apart from the fact that Senior Citizen Saving Scheme ICICI offers a higher rate of interest in comparison to similar investment instruments, here are a few of its most notable features –
The Finance Ministry declares the interest rate for Senior Citizen Saving Scheme ICICI prior to each quarter. The interest rate is subject to change as evident in the table mentioned below –
|Quarters||Rate of Interest|
|(FY 2021 – 22)||7.4%|
|(FY 2020-21) July to September||7.4%|
|(FY 2020-21) April to June||7.4%|
|(FY 2019-20) January to March||8.6%|
|(FY 2019-20) October to December||8.6%|
|(FY 2019-20) July to September||8.6%|
|(FY 2019-20) April to June||8.7%|
|(FY 2018-19) January to March||8.7%|
|(FY 2018-19) October to December||8.7%|
|(FY 2018-19) July to September||8.3%|
|(FY 2018-19) April to June||8.3%|
During the maturity period, the applicable rate of interest will be the same as notified when the deposit was made. Throughout the term, i.e., 5 years, the rate of interest applicable to a particular account will remain the same.
For example, if the deposit under Senior Citizen Saving Scheme ICICI is made in September 2020, the applicable interest rate will remain 7.4% till September 2025. On the extension of tenure by another 3 years, the applicable rate of interest will be the one that was applicable at the time of renewal. The interest is paid out on a quarterly basis.
Investors making deposits under the ICICI Senior Citizen Saving Scheme are entitled to enjoy tax benefit under Section 80C of the Income Tax Act, 1961. Under the provisions of this scheme, one can enjoy tax exemptions of up to Rs.1.5 lakh on their investments in a particular financial year.
The interest earned through the scheme, however, will be subject to taxation at the depositor’s end. Tax will be deducted from the source if the interest amounts to more than Rs.50,000 in a financial year.
|Senior Citizen Savings Scheme||Fixed Deposit|
|Rate of Interest
(as applicable on September 19th, 2020)
|7.4% (July to September 2020)||Ranges from 2.50% to 6.00%|
|Maturity Period||5 years||Ranges from 7 days to 10 years|
|Tax Exemptions On Returns||Taxable||Taxable|
|Tax Exemptions On Deposited Amount||Applicable||Applicable|
|Premature withdrawal||After 1 year (1.5% charge)||0.50% to 1.00%|
Even though Senior Citizen Saving Scheme ICICI is necessarily for retired individuals who are 60 years or more, one can enjoy the benefits of this scheme if they comply with the criteria mentioned below –
Nonetheless, one must note that the scheme excludes members of the HUF, Non-Resident Indians and Persons of Indian Origin.
Individuals will need to submitForm A along with other supporting documents to start an account under the ICICI Bank Senior Citizen Saving Scheme. This Form can either be downloaded from the official website of ICICI bank or obtained from any of its branches. Alongside this Form, one will also need to submit supporting documents including address proof, age proof, identity proof, and payment instruments such as demand draft or cheque.
It is important to note that these documents will have to be self-attested, while the submission of PAN is mandatory. Apart from the main features of this scheme mentioned previously, a depositor retains an option to include the nominee in the course of opening an account or at a later stage. Those not complying with the eligibility requirements to opt for this scheme can look into other options like an ICICI Bank FD to park their savings.
Mentioned here are the advantages of this investment:
– It facilitates to a direct credit or interest to the ICICI Bank Account.
– It has a quarterly interest initimation with the information of the deposit balance and transactions.
– Applicants can also use the phone banking facilities of the bank for complaints and queries.
– The bank has over 5000 branches to assist.
Q1. Is the 80C tax credit relevant to senior citizen savings plans?
Yes, investments in SCSS qualify for income tax deductions under Section 80C of the Income Tax Act of 1961.
Q2. What is the maximum age for opening a senior citizen savings account?
Anyone over the age of 60 can start a Senior Citizen Savings Account by submitting all relevant documentation.
Q3. Is it possible to register a combined SCSS account with a family member?
Only the spouse can register a joint SCSS account by investing a maximum of Rs.15 lakh (in multiples of Rs.1000).
Q4. What are the eligibility requirements for a joint senior citizen savings account?
When opening a combined SCSS account, the first depositor must be over the age of 60. The second applicant, on the other hand, has no age restrictions. Only the spouse and the spouse’s spouse can open a joint account. The full sum in a joint account, on the other hand, will be attributable only to the first account holder.
Q5. What is the penalty for premature withdrawal?
The penalties vary from 1% to 1.5% depending on the period.