Senior Citizen Savings Scheme (SCSS)

The SCSS, or Senior Citizen Savings Scheme, is a government-backed savings option designed to provide financial security to seniors aged 60 years and above. The regular flow of income, the safety of investment, and tax benefits are some of the attractive benefits of these SCSS schemes.  The SCSS interest rate is 8.20% p.a. in the 01 April to 30 June 2023 quarter.

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Let us have a detailed overview of this old-age savings scheme in this article.

What is Senior Citizen Saving Scheme (SCSS)?

The Government of India launched the Senior Citizen Saving Scheme (SCSS) to provide a regular source of income to senior citizens. The scheme’s savings are protected against any market fluctuations.

Individuals above the age of 55 years can also invest in the scheme, provided they have retired on superannuation or opted for VRS (Voluntary Retirement Scheme).

SCSS is one of the best tax-saving investment plans for senior citizens.

Features of Senior Citizen Saving Scheme

Let us learn the key features of the SCSS scheme from the table mentioned below:

Features Details
Launched By Government of India
SCSS Limit Rs. 1000- Rs. 30 lakhs*
Age Limit
  • Senior Citizens: 60 years & above
  • Superannuation/ VRS/ Special VRS Retirement: 55-60 years of age
  • Ex-Servicemen from Defence Services: 50 years of age
SCSS Account Type
  • Individual Option
  • Jointly with Spouse Option
Multiple Number of SCSS Accounts
  • Allows multiple SCSS accounts in the name of an account holder
  • Subjected to the maximum deposit limit of Rs. 30 lakhs including all accounts
SCSS Interest Rate 8.20% p.a. for the period 01 April-30 June 2023
Interest Payouts Quarterly (every 3 months)
Maturity Period 5 years
Extension of SCSS Account
  • By 3 years from the date of maturity
  • Can be extended within 1 year from maturity
Premature Withdrawal
  • Permitted (under exceptional circumstances)
  • Withdrawal Allowed After 1 Year: Some penalty
  • Withdrawal Between 1-2 Years: Penalty of 1.5% of the deposit amount
  • Withdrawal Between 2-5 Years: Penalty of 1% of the deposit amount
Multiple Withdrawals Not allowed
Nomination Facility Permitted
SCSS Tax Benefits Deductions u/ Section 80C of the Income Tax Act, 1961
Section 80C Limit Tax deductions of up to Rs. 1.5 lakhs on the payment of the annual premium
Taxation
  • Taxes are levied on the interest earned from SCSS
  • TDS: If interest is higher than Rs. 50,000 per year
  • Form 15G/15H: To avoid TDS payment if taxable income is less than tax exemption limits:
  • New Tax Regime: Rs. 7 lakhs
  • Old Tax Regime: Rs. 5 lakhs
Note: The maximum deposits limit increased from Rs. 15 lakhs to Rs. 30 lakhs from 01 April 2023

Senior Citizen Saving Scheme Interest Rate

Below is the SCSS rate of interest between the periods 2004-2023:

Period of SCSS Interest Rate (% annually)
02-08-2004 to 31-03-2012 9.00
01-04-2012 to 31-03-2013 9.30
01-04-2013 to 31-03-2015 9.20
01-04-2015 31-03-2016 9.30
1.4.2016 to 30.9.2016 8.60
1.10.2016 to 31.3.2017 8.50
1.4.2017 to 30.6.2017 8.40
1.7.2017 to 30.9.2018 8.30
1.10.2018 to 30.6.2019 8.70
1.07.2019 to 31.03.2020 8.60
1.4.2020 to 30.09.2022 7.40
1.10.2022 to 31.12.2022 7.60
1.01.2023 to 31.03.2023 8.00
1.04.2023 to 30.06.2023 8.20

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product an insurer offers.

Eligibility Criteria

To be eligible to buy the senior citizen savings scheme, the applicant needs to fulfil the following criteria:

Eligibility Criteria Details
Eligible Individuals
  • Senior Citizens
  • Retired Defence Personnel
  • Civilian Employees who opted for Voluntary Retirement/ Superannuation
Exclusions
  • Non-Resident Indians (NRIs)
  • Hindu Undivided Families (HUFs)
Age Criteria
  • Senior Citizens: 60 years & above
  • Superannuation/ VRS/ Special VRS Retirement: 55-60 years of age
  • Ex-Servicemen from Defence Services: 50 years of age
Criteria for SCSS Joint Account
    • Age criteria of the Primary Account Holder are considered
  • No age criteria on Secondary Account Holder

Documents Required

The list of self-attested documents required to open an SCSS account in India is as follows:

Documents Required to Opens SCSS Account
  • Duly filled application form to be collected from the post office or bank
  • KYC form
  • Photographs of the applicant
  • Permanent Account Number (PAN)
  • Address proof
  • Age Proof
  • Employer’s certificate in case of retirees
  • Proof of date of disbursal of the retirement benefits

How to Open a Senior Citizen Saving Scheme (SCSS) Account?

You can open your SCSS account with the following: 

  • Post Office Branch: Offline mode

  • Authorised Bank Branches: Offline/ Online mode

Let us understand the complete process to open an SCSS account in the section below.

Process to Open a Senior Citizen Saving Scheme Account at the Post Office

An SCSS account can be opened by filling out the application form at the post office with these 2 methods:

  • Access the form from the nearest Post Office branch

  • Download the application form from the official India Post website

Steps to fill out the SCSS application with the Post Office:

Step 1: Get the application from the nearby Post Office branch or download it from India Post's official website

Step 2: Enter the Name of the Post Office Branch in the available space in the top left corner

Step 3: Enter the Post Office Savings Account Number, if any

Step 4: Enter the Post Office branch address under the “TO” column

Step 5: Paste the passport-sized photographs of the applicant(s)

Step 5: Fill in the applicant’s name in the required space and tick-mark on the “SCSS” option

Step 6: Tick on the “Additional Facilities Available” option if you want to open a Savings Account

Step 7: Select the category of SCSS account holder:

  • Self

  • Minor Child (through a guardian)

  • Person of Unsound Mind(through a guardian)

Step 8: Select the type of SCSS account:

  • Single

  • Joint

Step 9: In the next section, enter the SCSS deposit amount in figures and words

Step 10: Enter the cheque number and date if depositing the amount through a cheque

Step 11: Enter the credentials of the applicant(s)

Step 12: Attach all the necessary documents and tick mark the provided proofs from the list mentioned in the form

Step 13: Checkmark the SCSS Declaration and enter the details in the provided space

Step 14: Sign the application at the required places by all the applicant(s)

Step 15: Mention the name and details of the SCSS account nominee with their signature

Process to Register Senior Citizen Saving Scheme Account at Banks

The facility to open an SCSS account is also available at various public/private sector banks. 

Steps to open an SCSS Account with the Banks:

Step 1: Collect the application form by visiting the nearest branch of the authorised banks

Step 2: Enter the necessary details in the required spaces

Step 3: Attach the necessary proofs and documents

Step 4: Pay the deposit amount and receive the payment receipt

Step 5: Duly sign and submit the filled application form

Step 6: The employees at the bank will process the application and open an SCSS account immediately 

Senior Citizen Saving Scheme Calculator

Calculating the interest rate of the senior citizen savings scheme is easy. The account holders can use the Post Office Senior Citizen Scheme Interest Calculator to know the interest amount on the contributions made in the SCSS scheme.

Features of the SCSS Calculator are as follows:

  • Calculate the SCSS interest on the deposited amount for the particular quarter

  • Gives you fast and accurate results

  • Helps you to plan your investments better by estimating the interest earned over a specific period

  • Easy-to-use and user-friendly online tool

  • Provides complete transparency in the calculation of interest earnings

Advantages of Senior Citizen Saving Scheme

Senior Citizen Saving Scheme is a saving and investment instrument – best investment option for old age and retired individuals. The SCSS scheme offers you high-interest rates along with the safety of investments. 

Benefits and Features of SCSS Scheme:

  1. Available Easily

    Just fill out an application form at your nearest bank/post office, and it is done.

  2. Reliable Investment Option

    It is an investment product backed by the Indian Government, thus loaded with security assurance.

  3. Multiple Account Facility

    An individual can open multiple Senior Citizen Savings Scheme accounts, individually or as a joint investor. The other investor must be the spouse of the primary investor.

  4. High Returns

    At the rate of 8.2% per year, the returns on the SCSS are very satisfying.

  5. Flexible Duration

    The SCSS account comes with a maturity period of 5 years, which can be extended to 3 more years. This makes it a good option for mid-to-long-term financial planning.

  6. Tax-Saving for Senior Citizens

    Senior citizens can avail of tax deduction benefits of up to Rs. 1.5 lakhs annually under the SCSS scheme u/Section 80C of the Income Tax Act, 1961.

  7. Choice of Investment

    You can invest between Rs. 1000 and 30 lakhs under the Senior Citizen Pension Scheme. This makes it a pretty scalable and affordable investment option.

  8. Premature Termination

    You can close your Senior Citizen Savings Scheme account and access your money during financial scarcity.

  9. Minimum Paperwork

    The application process for the Senior Citizen Saving Scheme requires minimum paperwork.

Disadvantages of Senior Citizen Savings Scheme (SCSS)

While the Senior Citizen Savings Scheme (SCSS) can be a good investment option for senior citizens, it has some disadvantages you should consider before investing. 

Here are some of the disadvantages of SCSS:

  1. Lower interest rates 

    The interest rates on SCSS are subject to change occasionally, and they may only sometimes be competitive with other investment options.

  2. Lock-in period 

    The SCSS has a lock-in period of 5 years. This makes it a less suitable option for those who require liquidity or have short-term investment goals.

  3. Limited investment amount

    The maximum amount that can be invested in SCSS is Rs. 30 lakhs, which may not be sufficient for those looking to invest a significant amount.

  4. Tax implications

    The interest earned on SCSS deposits is taxable and subject to TDS if the interest exceeds the threshold limit specified by the government.

  5. No premature withdrawal

    SCSS does not allow premature withdrawal before the completion of the lock-in period, except under exceptional circumstances such as the account holder’s death.

Banks offering Senior Citizen Saving Scheme

Apart from the post offices, the Senior Citizen Savings Scheme is also offered by selected banks in the country. 

List of banks offering SCSS Scheme:

Public Sector Banks

  • Allahabad Bank

  • Andhra bank

  • Syndicate Bank

  • State Bank of India

  • Bank of Baroda

  • Bank of Maharashtra

  • Bank of India

  • Canara Bank

  • Corporation Bank

  • Central Bank of India

  • Syndicate Bank

  • Dena Bank

  • Union Bank of India

  • UCO Bank

  • Vijaya Bank

  • IDBI Bank

  • Indian Overseas Bank

  • Indian Bank

  • Punjab National Bank

Private Sector Bank

  • ICICI Bank Ltd.

Wrapping It Up

Being a savings-oriented yet remunerative investment instrument, the interest rate of senior citizen savings schemes is locked at 8.2% for the April- June quarter. It offers senior citizens a platform to invest their money in a high-yielding, safe and widely popular savings instrument.

FAQ's

  • Is the SCSS interest rate fixed for 5 years?

    No, the SCSS interest rate is not fixed for 5 years. The Government of India quarterly revises the SCSS rate of interest. However, once an investor opens an SCSS account, the interest rate at the time of account opening remains fixed for the account's 5-year maturity period.
  • Which bank is best for senior citizen saving schemes?

    The Senior Citizen Savings Scheme (SCSS) offers standard interest rates of 8.2% p.a. decided by the Central Government. While several banks offer the SCSS, the best bank for senior citizens will depend on factors such as their location, convenience, and customer service.
  • What is the limit of the senior citizen savings scheme in 2023?

    In the Union Budget 2023, the Government of India increased the deposit amount limit for senior citizens from Rs. 15 lakhs to Rs. 30 lakhs. From 1st April 2023, the SCSS maximum limit is Rs. 30 lakhs.
  • Is SCSS tax-free?

    The interest earned on SCSS deposits is taxable under the Income Tax Act of 1961 and is subject to applicable tax rates. However, under section 80C of the Income Tax Act, 1961, senior citizens can claim a deduction of up to Rs. 1.5 lakh from their total taxable income for investments made in SCSS deposits.
  • When does the rate of interest on Senior Citizen Savings Schemes change?

    The rate of interest of the Senior Citizen Savings Scheme revises after every three months and thus it changes four times in one year.
  • Can anyone open a joint SCSS account with any family member?

    Yes, one can open a joint SCSS account with his/her spouse only and the maximum amount that can be invested in it is Rs. 15lakhs only.
  • Is section 80C applicable on SCSS?

    Yes, the investments that one makes towards the Senior Citizen Savings Scheme are eligible for tax benefits u/s 80C of the IT Act, 1961.
  • Is it possible to cancel or change the nominee of my Senior Citizen Savings Scheme?

    When one applies for an SCSS account, he/she is free to select the option of the nominee. Even an SCSS account holder is eligible to perform this activity until this account is in existence for a specific duration. In the same manner, the nominations made by a person can very easily be edited or canceled by submitting a fresh form, which is Form – C (nomination form) to the associated post office or bank.
  • In the case of a joint Senior Citizen Savings Scheme account, what does happen if the first account holder or depositor expires before maturity? Will this account be continued?

    Yes, in this case, the second account holder or nominee can hold the SCSS account provided he/she pertains to the rules of the Senior Citizen Savings Scheme.

Past 5 Year annualised returns as on 01-03-2024

^Tax benefit are for Investments made up to Rs.2.5 L/ yr and are subject to change as per tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

Tax benefit is subject to changes in tax laws. Standard T&C Apply
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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

#The lumpsum benefit is calculated if policyholder invested ₹10000 monthly for 10 years in the fund with a policy term of 20 years. This Point To Point past performance data of last 10 years has been used to illustrate a scenario for the customers benefit. It is assumed that the past 10 years returns would have also been delivered in last 20 years. This is not guaranteed and not in anyway indicative of what the customer may actually get 20 years from now. The investment is subject to market risk and the risk is borne by the policyholder.

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