The senior citizen savings scheme offers an interest rate of 8.6 per cent per annum.

India Post or Department of Posts, which operates the postal system of the country, also provides a range of financial services. The Department of Posts offers nine savings schemes with different interest rates. One such savings scheme offered by India Post is the Senior Citizen Savings Scheme (SCSS), which can be opened by an individual of 60 years or above. However, if any person who is 55 years or more but less than 60 years, and has retired on superannuation or under VRS (Voluntary Retirement Scheme) can also open the account subject to the certain conditions, noted India Post.

Here are key things to know about post office Senior Citizen Savings Scheme:

Amount

The minimum amount required to open the SCSS account is Rs. 1,000 and the maximum amount should not exceed Rs. 15 lakh. The account can be opened by cash if the amount is below Rs. 1 lakh. However, if the amount is Rs. 1 lakh or more, one needs to deposit a cheque.

Interest rates

The scheme offers an interest rate of 8.6 per cent per annum, according to India Post's website - indiapost.gov.in.

Income tax benefit

Investments under the scheme also qualify for the income tax benefit under Section 80C of the Income Tax Act. TDS is deducted at source on interest if the interest amount is more than Rs. 50,000 per annum.

Maturity

The maturity period of senior citizen savings scheme is five years. However, after maturity, the account can be extended for further three years within one year of the maturity by giving application in prescribed format. In such cases, account can be closed at any time after expiry of one year of extension without any deduction, according to India Post.

Premature closure

Under the post office's saving scheme, premature closure is allowed after one year on deduction of an amount equal to 1.5 per cent of the deposit. After 2 years, 1 per cent of the deposit is deducted.