Indian Bank Senior Citizen Savings Scheme

Indian Bank, headquartered in Chennai, was established in 1907. It has overseas branches in Singapore and Colombo. As recorded on March 31st, 2019, the total business of Indian Bank amounted to Rs.430,000 crores. The merger with Allahabad Bank from April 1st, 2020, has made Indian Bank the 7th largest bank in India.

The Indian Bank Senior Citizen Scheme was framed by the Government of India and launched in 2004, keeping in mind the unique requirements of retired senior citizens. The primary concern, in this regard, relates to parking retirement benefits in a secured investment instrument. SCSS addresses these two-pronged concerns, and the interest rate of this scheme is also significantly higher when compared to a similar investment instrument.

Features of Indian Bank Senior Citizen Savings Scheme 

Here are a few features of Indian Bank Senior Citizen Scheme –

• The minimum deposit amount allowed is Rs.1000 with the maximum limit being Rs.15 lakhs. Deposits can be made only in multiples of Rs.1000.
• The maturity tenure is 5 years, which may be extended by another 3 years.
• It is only the first account holder who is entitled to the matured amount.
• More than 1 person can be appointed a nominee.
• Interest is compounded annually and paid-out on a quarterly basis.
• A penalty of 1.5% will be charged on the deposit amount if the account is closed before 2 years. The penalty will be 1% if the account is closed after 2 years.

Rate of Interest Applicable against Indian Bank Senior Citizen Scheme

The Senior Citizen Savings Scheme offers the highest rate of interest in comparison to similar investment options. The Indian Bank SCSS interest rate, as on September 18th, 2020, is 7.4% for the second quarter (July-September 2020).

Ministry of Finance announces interest rates under the said scheme prior to every quarter, and it varies across the previous few quarters. Here is the rate of interest for the last few quarters –

Eligibility to Invest into Senior Citizen Saving Scheme Indian Bank

Individuals complying with the following eligibility criteria can avail the benefits of the Indian Bank SCSS –

• Applicants should be aged 60 years or above.
• Individuals aged 55 years but less than 60 years and have retired under a superannuation or voluntary retirement scheme (VRS).
• Retired defence personnel aged 50 years or above.

However, civilian personnel of the Defence Services, NRIs, PIOs and members of HUF are not eligible under Indian Bank Senior Citizen Scheme.

Taxability of Senior Citizen Saving Scheme

Deposits made under Indian Bank Senior Citizen Saving Scheme are qualified to avail tax benefits under the Income Tax Act, 1961, up to Rs.1.5 lakh in a particular financial year.

However, the interest generated under SCSS is taxable, provided it exceeds Rs.50,000 in a financial year.

Comparison between Senior Citizen Saving Scheme and Fixed Deposit 

The table below indicates the differences between the Indian Bank Senior Citizen Scheme and the banks’ regular Fixed Deposit instrument –

Documents Required to Open a Senior Citizen Savings Scheme Account 

Starting an account under the Senior Citizen Savings Scheme is hassle-free. It requires submission of Form A along with supporting documents. The Form can be downloaded from the official website of Indian Bank or collected from any of the branches.

Here a list of supporting documents that will have to be submitted –

• Age proof

• Address proof

• Permanent Account Number (PAN)

• Passport size photographs of the applicant

• Employer certificate and proof of disbursal of retirement benefits

While the application process of this Indian Bank Senior Citizen Scheme is fairly simple, the submission of Permanent Account Number (PAN) is mandatory. Moreover, the supporting documents will also have to be self-attested by the applicant to ensure that the application process for the scheme can be completed without hassle.