Maintaining financial stability after retirement is the priority of every senior citizen. Keeping this in mind, State Bank of India (SBI) has introduced the Senior Citizens Savings Scheme, which provides a secure and profitable investment opportunity for citizens aged 60 years and above. This scheme not only ensures regular income but also comes with features like tax exemption and high interest rate.
What is SBI Senior Citizen Savings Scheme?
SBI Senior Citizen Savings Scheme is a fixed term investment scheme in which senior citizens can avail attractive interest rates while keeping their capital safe. This scheme is ideal for those who want to get regular income from their savings. Also, the investor also gets a tax exemption of up to ₹ 1.5 lakh under Section 80C of the Income Tax Act 1961.
Eligibility to invest in this scheme
There are some prerequisites to invest in this scheme:
The applicant must be 60 years of age or above.
Government/bank retired employees (after VRS/superannuation) between 55 and 60 years can invest in this scheme.
Defence service retired personnel between 50 and 60 years can also avail this scheme.
The minimum investment amount can be ₹1,000 and maximum up to ₹30 lakh.
Investors can open individual or joint account in this scheme.
Interest Rate and Returns
Currently, an annual interest rate of 8.2% is offered on SBI Senior Citizen Savings Scheme. This interest rate is revised by the government from time to time. Interest is paid to investors on a monthly or quarterly basis.
Interest calculation:
If a senior citizen invests ₹30 lakh in this scheme, he will get a monthly interest of ₹20,050 or quarterly interest of ₹60,150 at an interest rate of 8.2%.
In five years, one can get an amount of ₹12,03,000 in the form of interest alone.
This scheme offers senior citizens an opportunity to earn a fixed monthly income without any risk.
Investment period and premature withdrawal
The tenure of this scheme is 5 years, which can be extended by an additional 3 years.
If investors want to withdraw their amount before the stipulated period, certain fee deductions will be applicable:
No interest will be given for withdrawal before 1 year.
A penalty of 1.5% will be deducted for withdrawal between 1 to 2 years.
A penalty of 1% will be charged for withdrawal between 2 to 5 years.
Key Benefits of SBI Senior Citizen Savings Scheme
Safe Investment: Being a government-backed scheme, there is no risk of capital.
High Interest Rate: The interest rate of 8.2% is higher than the normal FD of the bank.
Regular Income: Interest can be received on a monthly or quarterly basis.
Tax Benefits: Investment amount up to ₹1.5 lakh is eligible for tax exemption under Section 80C.
Flexibility: Facility to open individual and joint accounts.
Conclusion
SBI Senior Citizen Savings Scheme is a great option to achieve financial stability after retirement. It not only offers high interest rates but also can prove to be extremely beneficial for senior citizens as it is a risk-free investment. If you want to invest your retirement funds in a safe and profitable manner, this scheme can be a perfect option for you.
Before investing, contact the nearest SBI branch to confirm the interest rate and other rules.