Hit 55 and you can be on Cloud 9

NEW DELHI: Senior citizens who have taken voluntary retirement will be eligible to invest their funds in the 9% Senior Citizens Savings Scheme at the age of 55. The government today lowered the minimum age for subscription to the scheme by 5 years — from 60 years to 55 years — for those who have retired under a voluntary or a special voluntary scheme, subject to specified conditions. This will benefit the salaried class who opt for voluntary retirement.

For others not falling in this category, the minimum age limit for investment in the scheme will be 60 years.

NRIs and Hindu Undivided Families (HUFs) will not be eligible to invest. The scheme, which was notified today, will be initially available through post offices but may be offered through banks at a later date. Senior citizens will be offered a 9% annual interest rate (taxable) which is 1% higher than the 8% return offered on other small savings instruments like PPF and GPF.

Under the new scheme, senior citizens will be allowed to deposit a maximum of Rs 15 lakh for a minimum of 5 years, extendible by three more years. Interest will be payable at quarterly rests on a non cumulative basis.

Joint accounts will be permitted but only spouses will be allowed to open accounts jointly with beneficiaries. Deposits have to be in multiples of Rs 1,000 and premature withdrawal will not be allowed before a year. Withdrawals will be permitted after a year but subject to deductions. Income from the senior citizens scheme will be subject to tax. While investments in the senior citizens scheme will be non-tradable and non-transferable, nomination facility will be available. Initially, the scheme will be available through post offices but may be offered through banks at a later date.