Most sites will have already told u all the salient features of SCSS 2004.
It is a good scheme for resident 60+ yr old seniors with early wdl option albit with a penalty. What i want to focus on are practical aspects of running an account.
1 Where to open ?
SBI, BOI And ICICI? are decent banks and can be a good option. Post office can be very slow and tedious as they are over bureaucratic and shoddy. Note as it is treated as a service banks can also be lethargic in dealing with these account holder.
2. Opening Precautions
Carry photos , pan details, kyc details , bank chq (cancelled) etc. Be careful to abide by the rules especially if u are a retiree parking funds in scss.
Always nominate a person…saves loads of paperwork later for ur loved ones. In case of joint accounts the joint holder precedes the nominee in claims.
4.How to Transfer SCSS accounts to other Deposit offices:
QUOTE Notification No. GSR 176 (E) -dated 23.3.2006, use FORM G
Charges : Where the deposit is Rs. One lakh or above, 5 Per Lakh for first transaction, RS. 10 per lakh of deposit for the second and subsequent transfers.
5. TDS / TAXABILITY / Tax benefit
Investments carry an 80C rebate.
Notification No. F.No. 2-8/2004-NS.II dated 28.3.2006. the deposits are taxable if interest exceeds set limits (Rs10,000) . To avoid TDS file Form 15 h if ur above 65 yrs else Form15G if ur 60 to 64 yrs annually with ur Deposit office.
5. Repayment /Early or Premature Withdrawal
LOCKIN Period : 1 YR
1yr to 2yrs : 1.5 % penalty deduction from corpus
2yrs + to 5yrs : 1% penalty deduction from corpus
Maturity 5yrs : Interest at Postal SB rates on corpus if a/c is not extended vide FORM B within one year of the maturity date.
No penal interest if ac is closed after one yr from the extension date .
On Death of depositor:
In case of death of the depositor before maturity the account shall be closed and deposit refunded on application along with interest to the nominee, or legal heirs in case the nominee has also expired or nomination was not made as per rules.
However, in case of the demise of the principal depositor, the spouse either being a joint holder or sole nominee may continue the account on existing terms of the Scheme, provided the spouse has not opened any such account, and even if the spouse has another account the total deposits of both the accounts should not exceed Rs.15 lac.