Everything you need to know about Senior Citizen's Savings Scheme
Senior Citizen's Savings Scheme (SCSS) is a government-sponsored savings scheme for senior citizens, launched in 2004. The scheme's primary objective is to help senior citizens ensure a regular flow of income. The plan offers guaranteed interest payments, which can be received quarterly. It aids senior adults in saving for retirement and earning interest payments on a quarterly basis. SCSS is offering a 7.4% interest rate for the quarter ending March 31, 2022. A minimum deposit of Rs.1,000 is required to open a SCSS account.
The total value of the deposit should not exceed Rs.15 lakh, and the interest will be paid on the 31st of March, 30th of June, 30th of September, and 31st of December each year.
SCSS Interest Rates
Tenure |
5 years |
Interest Rate |
7.40% p.a. |
Investment Amount |
Maximum amount that can be deposited is Rs.15 lakh |
Premature Withdrawal |
Allowed |
What is an SCSS account?
A Senior Citizens' Saving Scheme (SCSS) account is a Government of India-backed account that provides retirement benefits. Senior citizens in India can take advantage of the account's benefits by making a lump-sum investment in the scheme, either individually or collectively. After retirement, the account will provide regular income and income tax benefits.
You can make a single deposit to the account. As a result, an account holder may operate multiple accounts under the plan as long as the total deposits in all accounts do not exceed the maximum limit, which is Rs.15 lakh. Furthermore, no more than one account may be opened in the same deposit branch simultaneously.
Eligibility for SCSS scheme
- The individual must be a citizen of India. NRIs, PIOs, and HUFs are not eligible
- Any resident of India aged 60 years or above is eligible for this scheme. However, retirees aged 55-60 years who have opted for Voluntary Retirement Scheme (VRS) or Superannuation are eligible to avail of the scheme if they apply for the same within one month of gaining their retirement perks
Also, retired defence personnel can avail of this scheme irrespective of their age, provided they fulfil all other conditions
- This scheme can be availed with a minimum deposit amount of Rs. 1,000
How to Open an SCSS Account
An SCSS account can be opened at any authorised bank or Post Office branch. You can open an SCSS account online through the bank's internet banking portal or mobile banking app if the bank allows it. The Post Office does not offer an online option for opening an SCSS account.
You will not be able to open an SCSS account online at this time. Neither licenced banks nor the Post Office offers an internet platform to open an account. To open the account offline, please complete the steps outlined above.
Step 1: Go to the bank branch or post office, request an application form and fill out all the required information.
Step 2: Include any supporting documentation with the application form, such as a letter from your employer confirming your retirement benefits.
Step 3: Hand over the paperwork and deposit to the branch.
Step 4: After application review, once the payment has been processed, your SCSS account will be created.
SCSS Interest Rate
Given below are the interest rates of the SCSS:
Financial Year |
Rate of interest p.a. (%) |
April to June (Q1 FY 2020-21) |
7.4 |
Jan to March (Q4 FY 2019-20) |
8.6 |
Oct to Dec 2019 (Q3 FY 2019-20) |
8.6 |
Jul to Sep 2019 (Q2 FY 2019-20) |
8.6 |
Apr to Jun 2019 (Q1 FY 2019-20) |
8.7 |
Benefits of senior citizen savings scheme (SCSS)
- Being government-backed, SCSS offers investment safety
- It offers reasonable returns on your investment
- Investments made under this scheme also qualify for a tax deduction of up to Rs. 1.5 lakh under section 80C. However, income tax is deducted on the interest earned
- It is extremely easy to open, operate, and transfer an SCSS account at any authorised bank or post office in India
- It offers the flexibility to extend the tenor. You can start with a tenor of 5 years, and at maturity, extend it up to 3 more years only
- You can calculate the SCSS interest rate easily by computing the compound interest on deposit amount per the SCSS interest rate for that quarter. The payment is released annually to the savings account of the account holder
Senior citizens can avail of interest rates up to 8.50% by investing in a Bajaj Finance Fixed Deposit.
Apart from the SCSS, senior citizens can also invest in Bajaj Finance Fixed Deposit, and earn interest rates of up to 8.50% .
Documents required to open SCSS account
- Two passport-style photos
- Form A must be filled out completely and submitted
- A passport or a Permanent Account Number (PAN) card must be shown as proof of identity
- Individuals must provide proof of address in the form of an Aadhaar card or a phone bill
- A document proving the person's age must be presented. PAN Card, Voter ID, Birth Certificate, Senior Citizen Card, or Passport can all be used as proof of age
Self-attestation is required for all documents submitted to open an account.
Frequently asked questions (FAQs)
The current interest rate in the SCSS is 7.4% p.a.
Under section 80C of the Income Tax Act, 1961, an amount deposited under the Senior Citizens Savings Scheme Rules, 2004, is entitled to a deduction of Rs. 1.50 lakh.
Under SCSS, the interest amount is paid to the accountholders quarterly, ensuring period payouts adding to your investment. Interest will be credited every financial year on April 1, July, October, and January.
For five years, the money put in the SCSS account earns interest. Within one year of the account's maturity, the holder can seek a three-year extension. The interest rate on a deposit in an extended SCSS account will be the rate in effect on the maturity date.
When the account is opened, the depositor is given a passbook that contains information such as the account number, the depositor's name, portrait, address, the amount deposited, the dates and amount of quarterly interest payments, and the maturity date and amount, and nomination data.
