One of India’s oldest government-owned commercial banks, the UCO bank was established in the year 1943. With over 49 zonal offices and 4000 service units spread across the country, this bank has equity of around Rs.9918 crore. The bank offers a host of industry-first financial products and services to its customers, of which the Senior Citizen Savings Scheme is among the most popular ones.
The UCO Bank Senior Citizen Scheme, for instance, is a government-sponsored investment option, which was introduced keeping in mind the specific requirements of senior citizens.
The UCO Bank Senior Citizen Scheme offers significantly higher interest rates when compared to another similar investment instrument. Here are a few major features of the scheme –
The Ministry of Finance announces the interest rate against SCSS for a particular quarter, well ahead in time. This interest rate is, however, subject to change.
The table below indicates the interest rates that have been prevalent 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%|
Throughout the entire tenure, the interest rate prevalent when the deposit was made will be applicable. In the course of the term of maturity, i.e., 5 years, the interest rate will not change.
For instance, if the investment under SCSS is made in September 2020, the applicable UCO Bank SCSS interest rate will be 7.4% till September 2025. If the account is extended until 2028, the applicable interest rate will be the one that was prevalent at the time of renewal.
The earned interest is paid-out on a quarterly basis.
While UCO Bank Senior Citizen Scheme is for senior citizens who have attained 60 years of age, there are exceptions as well –
Members of the Hindu Undivided Family, Persons of Indian Origin and Non-Resident Indians cannot opt for Senior Citizen Savings Scheme.
Investments made under the UCO Bank Senior Citizen Savings Scheme are eligible for tax benefits. Investors can enjoy income tax exemptions under Section 80C of the Income Tax Act, 1961. It is applicable for up to Rs.1.5 lakh in a given financial year.
However, the interest accrued on the invested deposit is subjected to taxation at the end of the recipient. If the interest earned is more than Rs.50,000 in a financial year, taxes will be deducted at source.
It was a major trend among senior citizens to park their retirement benefits in fixed deposits, wherein the interest generated offer a steady cash flow. However, with the interest rate of fixed deposits reducing steadily, the Senior Citizen Savings Scheme has garnered popularity owing to multiple benefits tailor-made for senior citizens.
Here is a comparison between the Senior Citizen Savings Scheme and Fixed Deposit of UCO Bank –
|Senior Citizen Savings Scheme||Fixed Deposit|
|Rate of Interest
(as on September 15th, 2020)
|7.4% (July to September 2020)||3% to 5.75%|
|Maturity Period||5 years||7 days to 3 years|
|Tax Benefit (On Returns)||Taxable||Taxable|
|Tax Benefit (On Investment)||Applicable||Applicable|
|Premature withdrawal||After 1 year (1.5% penalty)||2% penalty|
Opening an account under the UCO Bank Senior Citizen Scheme is fairly simple. Form A can be obtained both from the official website of UCO Bank or from any of its branches. Form A should be filled up in its entirety and submitted along with the necessary supporting documents.
These supporting documents include address proof, age proof, identity proof, and the payment instrument such as demand draft or cheque. These documents will have to be self-attested. It is crucial for individuals to have such information readily available at their disposal to ensure that they can enjoy the benefits of UCO Bank SCSS without hassle.