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All About Senior Citizens Saving Scheme

The Reserve Bank of India (RBI) is the apex financial body. It launched the Senior Citizens savings scheme in 2004 to enable the senior citizens and also to enhance the saving habits of the same.

Some of the details about the same scheme can be understood from below mentioned points which carefully analyze the aspects of the scheme.

People who invest their hard earned money in the Senior Citizen Savings Scheme (SCSS) are blessed with many benefits.

Not only do they get a higher interest rate at their saving but also get a rebate on tax due to certain clauses mentioned in the Income tax Law.

The RBI Senior Citizen Scheme is designed for people aged more than 60 seeking for a medium term investment. The maximum investment under this is Rs. 15 lakhs with quarterly interests. Under this particular scheme, investors may also avail several tax benefits.

As far as the saving of tax is concerned and as mentioned in the book of rules in the Income Tax Act, the withdrawal of amount under this scheme within 5 years would lead the person to a certain penalty.

To make sure that the benefits as mentioned in the scheme actually pay off, the period of 5 years becomes crucial due to this clause. One must be smart enough to make decision thinking about the benefits that pertain to the actual investment and the interest that it will yield.

Although, there are many positives about this scheme, there is also one negative point in it, which is the fact that the instruments do not have liquidity. People who invest in this are not allowed to move out or move in according to their wishes - this might come as a huge negative. Considering the fact that a sudden need arises, this investment then would not be of benefit.

Having said that, there are very few investments that offer both protection and benefits, so if one manages to exploit the limit of an individual, this plan is a superb option.

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