SCSS – Senior Citizen Savings Scheme

The Senior Citizen Savings Scheme (SCSS) is a savings scheme specifically designed for senior citizens in India, offering a fixed rate of interest and providing senior citizens with a secure investment option. The scheme is offered by the Indian government and can be availed from designated post offices and selected commercial banks. The minimum deposit for SCSS is INR 1000, with a maximum deposit limit of INR 30 Lakhs per individual. The investment tenure is five years, with the option of extension for a further three years.

As of February 1st, 2023, if the interest rate is 7.4% p.a., then investing INR 30,00,000 in the Senior Citizen Savings Scheme (SCSS) would result in an annual income of approximately INR 2,22,000.

The benefits of the Senior Citizen Savings Scheme (SCSS) are as follows:

  1. Fixed-rate of interest: SCSS offers a fixed rate of interest, providing senior citizens with a secure and predictable source of income.
  2. Tax benefits: The interest earned on the deposit is taxable but is eligible for tax benefits under Section 80C of the Income Tax Act.
  3. Safe and Secure: Being a government-sponsored scheme, SCSS is a safe and secure investment option for senior citizens.
  4. Easy to open: The process of opening an SCSS account is simple and straightforward, with minimum documentation required.
  5. Widely available: SCSS accounts can be opened at designated post offices and selected commercial banks, making the scheme widely available to senior citizens.
  6. Maturity: After five years, the deposit matures and can be extended for a further three years.
  7. Liquidity: The deposit can be prematurely withdrawn after one year, but with a penalty.
  8. Guaranteed returns: The government guarantees the return on the deposit, providing peace of mind to senior citizens.

Overall, SCSS is a convenient and profitable investment option for senior citizens in India, providing a regular source of income and ensuring a secure financial future.

The process to open a Senior Citizen Savings Scheme (SCSS) account is as follows:

Eligibility: To open an SCSS account, the individual must be a senior citizen aged 60 years or above. If the individual is aged between 55-60 years, they are eligible to open an account only if they have retired on superannuation.

Required Documents: To open an SCSS account, the individual must furnish the following documents:

  • Proof of age (Passport, PAN card, Voter ID, Driving License)
  • Address proof (Passport, Voter ID, Driving License, Bank Passbook)
  • Two passport-size photographs
  • PAN card

Selecting a Bank or Post Office: SCSS accounts can be opened at designated post offices and selected commercial banks. You can choose to open an account at either a post office or a bank, as per your convenience.

Filling an Application Form: The individual must fill in the SCSS account opening form and attach the required documents.

Making the Deposit: The individual must make an initial deposit of at least INR 1000 and a maximum deposit of INR 30,00,000. The deposit can be made through cash, cheque or demand draft.

Account Activation: Upon successful submission of the form and deposit, the SCSS account will be activated and a passbook or account statement will be provided to the individual.

Note: The specific process and requirements may vary from bank to bank or post office to post office, so it’s best to check with the specific institution you plan to open an account with for more detailed information.

The Pros and Cons of Investing in Real Estate

Investing in real estate, particularly rental property is a lucrative business. Many people have multiplied their riches by purchasing land and inhabitable buildings at the right time. However, every investment has its perks and drawbacks, so it is no different from real estate. If you are looking for the long time investment, buying real estate is a viable option. If you have no prior experience purchasing and selling real estate, you definitely need to learn some basics before diving in. It is wise to understand the potential pros and cons of a venture before putting your money down. 

Pro: A Tangible and Secure Investment

The best thing about real estate is that it is a concrete investment, i.e. you can see and feel it. It is undoubtedly superior to virtual assets like cryptocurrency and digital art. You can never lose property in your name, and you have the option to liquidate it whenever you want. The public demand for housing and accommodation can never cease to exist, so you know that owning real estate is progressively profitable. 

Con: Initial Costs are too high

Real estate is expensive, which is why investing in it is not something many can afford. You shall require hefty initial capital to be able to buy a property that can later be rented out or sold at a profit. Paying for real estate in a lump sum (one full payment) allows considerable concession in the overall price, but arranging for such a large sum of money is impossible for most beginners. Many people mortgage property, though that still requires a big down payment, and interest is levied on the following installments. 

Pro: Excellent source of Passive Income

Once you have bought a residential or commercial property, you may rent it out and generate revenue effortlessly. The money paid by your tenants can easily cover mortgage payments and other miscellaneous costs of the real estate. The money left after compensating for all the property-related expenses is yours to spend. If you invest in multiple rentals, the income generated from all sources should be enough to pay for personal day-to-day expenses and much more. Being a landlord and reaping the benefits of your real estate investments definitely beats a dull nine-to-fiver that pays minimum wage. 

Con: Ongoing Costs and Maintenance apply

Real estate is a material asset, which means it undergoes wear and tears over time. As a landlord, it is your duty to conduct regular repair and maintenance practices to keep the property in sound and livable conditions. Real estate is subject to property tax, higher if used as a rental or for commercial purposes. It is recommended to get your property insured as well; the insurance you pay on a monthly basis will protect you against unanticipated disasters that may cause severe property damage. 

Pro: Property appreciates over time

The value of real estate almost always increases over time. The house or land your parents may have bought decades ago is probably worth at least ten times more than what they paid for it. You can find cheap and promising property in underdeveloped and developing neighborhoods. When these areas become densely populated, the cost of real estate and the rate of rent will automatically surge. Buying real estate in an already flourishing neighborhood wouldn’t come cheap, but it is a cost-effective investment if you have sufficient funds available. 

Some investments take more time to appreciate than others, thus patience is the key. Do your research before investing in a largely undeveloped area; obtaining cheap property therein could be disadvantageous if the area has no evident potential to prosper. You may get your hands on a somewhat cheap fixer-upper in a fairly affluent locality; however, the investment could backfire if the property is beyond repair or needs extensive renovation/restoration work. 

Con: The landlord life comes with challenges

Transitioning to landlord status is not as easy as it seems. You may view yourself as a figure of authority, but do not forget that the position comes with a range of responsibilities. During your journey as a landlord, you shall have to deal with several different kinds of tenants. Landlords and tenants are usually at odds with each other; hence, be prepared for handling stressful situations from time to time. If you discriminate among tenants or fail at ensuring the safety and wellbeing of residents, you could end up getting sued.

Tenants with money problems may refuse to vacate your property and obtain a legal stay; you might be left with no choice other than to let them occupy the place for a certain time period without paying rent. If you invest in seasonal property, such as a beach house, bear in mind that it might not generate any income for the most part of the year. 

Pro: Negligible impact of Inflation and Recession

Buying real estate is among the steadiest investments because it rarely depreciates, regardless of the country’s economic conditions. When prices go high, the value of the real estate will rise accordingly, so you won’t incur any losses. During the recession, the price of a residential and commercial property may slightly drop, but this setback is typically short-lived. The good news is that the recession provides the ideal time frame to invest in real estate. When the period of recession has passed, you can sell the acquired property at a handsome profit. 

Con: Possibility of Fraud

Real estate investment is essentially tricky for first-timers due to the prevalence of fraudsters in the market. It is crucial to physically visit a property and thoroughly inspect it before you make a transaction. Ensure that the seller is genuine and the property is reasonably priced; a deal that sounds too good to be true is likely to be a scam. The best way to avoid falling victim to real estate fraud is to work with a certified real estate attorney. Your attorney will run a background check on the property and seller to determine the feasibility of the purchase, as well as take care of all the legal paperwork. 

Central KYC Registry: All You Need to know about

You might have heard about eKYC but have you heard about Central KYC? why and where you need to fill the form? What’s your benefit? I will share A to Z of cKYC here in this article.

What is cKYC?

Centralized KYC is the central record to keep your KYC safe and validate with other organizations when and as needed without submitting the KYC document to every company. Once you have completed the cKYC you will get the 14 digit KYC Identifier number which can be given in any financial organization to complete your KYC. cKYC is like Adhar for Financial KYC.

CERSAI: Agency Behind CKYC

The Central KYC (Know Your Customer) database is maintained by the Central Registry of Securitization Asset Reconstruction and Security Interest (CERSAI). CERSAI is the Central KYC registry authorized by the Central Government to act as a regulatory body and fulfill the responsibilities of the Central KYC Records Registry under the Prevention of Money-Laundering Act, 2005. CKYC involves collecting, saving, securing, and retrieving the KYC records of an investor in the digital form at the central level you don’t have to submit your KYC again in all the financial organizations. This cKYC can be used in all banks, Mutual Fund organizations, Insurance companies, etc.

Motive of cKYC

The motive of centralized KYC is to bring transparency in the investment and financial sector. This will eliminate Adhar and PAN card verification. All you need is a 14 digit CKYC Identifier and your financial institution will pul your KYC from the server.

Where can cKYC be used?

Currently, this can be used in Banks, Insurance companies, Mutual Fund Companies, etc.

Who can access CKYC? 

Only a registered financial institution’s authorized person will be able to retrieve your CKYC.

What data will be available in CKYC?

Primarily it will have 14 digits KYC Identifier, your full name, date of birth, Email address, Phone Number, Permanent address and correspondence address. If you need to change or update any data in cKYC, you need to approach the Registry and submit the form to update the data in the system.

Types of KYC

KYC: This is normal KYC where you submit your documents manually to an organization when they demand KYC.

eKYC: This is Adhar based electronic KYC, widely used in the Telecom sector to validate their customers by Biometric Identification or OTP Based verification.

CKYC: This is a new kind of centralized KYC. This has to be done once and will work for multiple companies.

Documents Required for cKYC

For Central KYC you need to submit the following documents:

  1. Filled and signed cKYC form
  2. ID Proof self-attested
  3. Residence Proof self-attested
  4. 1 photograph 

If you have submitted your KYC in any financial institution it is most likely that they will fill and submit the CKYC on your behalf and you will receive the notification on your email address.

cKYC

Types of CKYC

Normal KYC

This is a simple KYC. You can submit any of these official documents.

  1. PAN card
  2. Aadhaar card
  3. Driving license
  4. Passport
  5. NREGA Job Card
  6. Voter Id card

Simplified or Low-Risk KYC

If you can not submit any of these official document you can have the Low-Risk KYC without giving any of the official documents above. This Low-Risk Profile will carry L prefix in their KYC Identifier number.

You need for furnish any of these document:

Photo Identity card issued by state govt / central govt, public sector undertakings (PSUs), legal/administrative authority, public financial organizations, and scheduled commercial banks. if a person doesn’t have the above ID proof they can also submit a Letter with a duly attested photo of the person issued by a gazetted officer.

Small KYC

If you can’t produce any of the documents above and do not qualify for Low-Risk KYC, you can apply for Small Account. This small account will have S prefix to their CKYC Identifier number and this will have some limitation. For example 

  • Upto Rs,1,00,000 credit limit in a year.
  • Upto Rs.10,000 withdrawal in a month. 
  • Upto Rs.50,000 account balance at any time.

You can not exceed these limits in small KYC.