Most commonly known as the best option for senior citizens’ finance needs, Senior Citizen Deposit Plans act as secure funding for needs in the golden years of your life. After retirement or after official renouncement of business, the first concern is a source of income. One should start planning in advance to avoid being in an unwanted situation and an ideal way is a Senior Citizen’s Deposit Plans. These plans can be put to use only after 60 years of age. So, in case you haven’t invested from the active years of employment, this is the prudent alternative. It helps you sort your money needs in a systematic and organised manner without any rush and hassles.

There are some factors that you need to consider before investing in senior citizen’s deposit plans:

• Age requirements – It is of special importance to note that this deposit plans are available only after the age of 60 years. In case one has retired on superannuation or taken a voluntary retirement scheme, they can invest, but the age limit needs to be at least 55 years. Retirement from defence and army services calls for a different set of rules again. There is no age limit but certain extra conditions apply too.

• Other restrictions – You have to be an Indian citizen to be able to open the this deposit plan. If you are not a resident of India or are just a person of Indian origin or come under the Hindu Undivided Families criteria, you are not allowed to book this plan.

• Funds generation – If you are between 55 and 60 years of age, the funding has to come from the retirement benefits money. But if you have crossed the age limit of 60 years, the source of income does not really matter. In fact, there is no restriction as to how you fund the deposit.

• Maturity – The senior citizen’s deposit plan can be set to mature anywhere between 1 to 5 years. Also, pre-mature withdrawals are allowed, subject to certain rules and regulations.

• Rate of interest – Senior citizen deposit plans have a preferential rate of interest. They are generally at par with other deposits. Also, the interest payable is calculated and paid out every 3 months.

• Income Tax – Under section 80 C, the investment made is tax-free but the interest earned is subject to taxes.

• Joint account – It can be opened with a joint account holder who necessarily has to be the spouse.