Post-retirement stress? After retirement, it’s a completely different phase of life. It feels difficult to come to terms with this new chapter of life. You’ve been working since 30-40 years and suddenly your professional career comes to a halt. You’ve been used to the early morning alarms and the rush hour commute among several other memories. Also, along with all of these, comes a halt to your monthly salary. Hence, it’s vital to have necessary funds post-retirement and that’s why savings are very important. There are several ways of investing to your post-retirement savings, but the best way is to invest in a Senior Citizen Saving Scheme. It’s noticed that employees are often confused about which savings scheme to invest in.
What is a Senior Citizen Savings Scheme?
This is a Government of India scheme and is targeted at all citizens of India over the age of 55 years. Senior Citizen Savings Scheme offers 6% – 9.3% interest per annum. And as it’s a government scheme, it’s completely safe and worthy of investment.
Several banks offer a Senior Citizen Savings Scheme and have their own set of pros and cons. Kotak Bank is one such bank that offers its own version of Senior Citizen Savings Program called ‘Senior Citizens Term Deposits’. In this version the pros outweigh the cons and following is a detailed description of the entire scheme.
Senior Citizen Savings Scheme: Senior Citizen Term Deposits
Kotak Bank provides a senior citizen savings account that offers benefits to the new-age senior citizens of India. Following are the features and benefits of the Savings Program
– Up to 7.9% of interest per annum
– You can make a deposit of as low as Rs. 10,000
– Booking period can be extended from 7 days to 10 years
– Option of choosing when to receive interest (monthly, quarterly or till maturity)
– Book term deposits through Netbanking
– Premature or Partial withdrawal is permitted
– Nomination and liquidity facilities are available
– You can also avail Overdraft facility against term deposit
Eligibility for Senior Citizen Term Deposit Program
The individual should be a citizen of India and more than 60 years of age.
Frequently asked questions about ‘Senior Citizen Term Deposit’
Tax Deducted at Source or TDS, is deducted every time the financial institution re-invest/pays interest during the financial year. It is also deducted on unpaid interest at the end of the financial year.When am I liable for TDS?
In a financial year if the aggregate interest you earn for deposits held in a certain customer ID is greater than Rs. 10,000 only then are you liable for TDS.
When and how can I apply for exemption on TDS
Only when your interest amount for the financial year does not fall within the overall taxable limits you can claim for exemption of TDS. Inform about this to the concerned financial institution and submit a form as per the provisions of the Income Tax Act.
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