Senior Citizen Savings Scheme (SCSS) is a preferred fixed income investment option for people above the age of 60 years. The primary objective of this scheme is to help senior citizens ensure a regular flow of income post retirement. Since SCSS is a government-backed investment scheme, it gives guaranteed returns on a quarterly basis. One can avail the Senior Citizen Savings Scheme through certified banks and post offices in India.
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Senior Citizen Savings Scheme (SCSS) Highlights
|Interest Rate||7.40% per annum (Q2 FY 2022-23)|
|Tenure||5 years (with an option to extend it for 3 more years)|
|Minimum Investment Amount||Rs. 1,000|
|Maximum Investment Amount||Rs. 15 Lakh or the amount received on retirement, whichever is lower|
|Premature Withdrawal Penalty|
SCSS Interest Rate
Senior Citizen Savings Scheme (SCSS) interest rates for the second quarter (July-September) of FY 2022-23 is 7.4% p.a. This is one of the highest interest rates offered by a fixed income small savings scheme.
SCSS interest rate is reviewed quarterly and is subject to periodic change. Interest is also calculated and credited quarterly.
Given below are the historical interest rates for Senior Citizen Savings Scheme:
|Time Period||Interest Rate (% annually)|
|April to June (Q1 FY 2022-23)||7.4|
|Jan to Mar (Q4 FY 2021-22)||7.4|
|Oct to Dec (Q3 FY 2021-22)||7.4|
|Jul to Sep (Q2 FY 2021-22)||7.4|
|April to June (Q1 FY 2021-22)||7.4|
|Jan to March 2021 (Q4 FY 2020-21)||7.4|
|Oct to Dec 2020 (Q3 FY 2020-21)||7.4|
|Jul to Sep 2020 (Q2 FY 2020-21)||7.4|
|Apr to Jun 2020 (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|
|Jan to March 2019 (Q4 FY 2018-19)||8.7|
|Oct to Dec 2018 (Q3 FY 2018-19)||8.7|
|Jul to Sep 2018 (Q2 FY 2018-19)||8.3|
|Apr to Jun 2018 (Q1 FY 2018-19)||8.3|
|Jan to March 2018 (Q4 FY 2017-18)||8.3|
|Oct to Dec 2017 (Q3 FY 2017-18)||8.3|
|Jul to Sep 2017 (Q2 FY 2017-18)||8.3|
|Apr to Jun 2017 (Q1 FY 2017-18)||8.4|
SCSS Eligibility Criteria
If you fall in the following groups, you are eligible to invest in the Post Office Senior Citizen Savings Scheme:
- Indian citizens above the age of 60 years
- Retirees in the age bracket of 55-60 years who have opted for Voluntary Retirement Scheme (VRS) or Superannuation*
- Retired defence personnel above 50 years and below 60 years of age*
*Investment must be made within a month of availing the retirement benefits.
Note: HUFs and NRIs are not eligible to invest in Senior Citizen Savings Scheme
Benefits of Investing in Senior Citizen Savings Scheme
Given below are the top reasons why Senior Citizen Savings Scheme is a preferred investment option among senior citizens:
- Guaranteed Returns: Since SCSS is a government-backed small savings scheme, it is one of the safest and most reliable investment options for senior citizens.
- High-Interest Rate: Offering interest at the rate of 7.4% per annum, SCSS is among the most beneficial investment options, especially compared to the rather traditional ways of savings such as FD and Savings Account
- Tax Benefit- Under section 80C of the Income Tax Act, SCSS is eligible for a tax deduction of up to Rs. 1.5 Lakh per annum.
- Simple Investment Process: The process of investing in SCSS is quite simple. You can open an SCSS at any authorized bank or any post office in India.
- Quarterly Interest Payouts: Under SCSS, the interest amount is paid to the accountholders quarterly which ensured period payouts adding to your investment. Interest will be credited on the first day of April, July, October, and January every financial year.
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Senior Citizen Savings Scheme (SCSS) Deposit Limits
Eligible investors can make a lump sum deposit in Post Office Senior Citizen Savings Scheme (SCSS).
- Minimum Deposit– Rs. 1,000 (and in multiples thereof)
- Maximum Deposit– Rs. 15 Lakh or the amount received on retirement, whichever is lower
While deposits in SCSS accounts can be made in cash, it is allowed only for amounts less than Rs. 1 Lakh. For deposits exceeding Rs. 1 lakh, using a cheque/demand draft for is mandatory.
SCSS Maturity Period
A Senior Citizen Savings Scheme matures after 5 years calculated from the date of account opening. However, the account holder does have the option of extending the account for an additional 3 years after it has matured. This extension option is currently available just once and the extension request has to be made within 1 year of maturity of the SCSS account.
How to open Senior Citizen Savings Account?
You can open SCSS account at any authorized banks or post office branches in the country.
Opening SCSS Account at Post Office
You can open a Senior Citizens Savings Scheme account at all India Post Offices. You will need to fill the account opening form and submit it along with copies of KYC documents including proof of identity, proof of address and proof of age along with 2 recent passport size photographs.
Opening SCSS Account at an Authorized Bank Branch
Apart from the post offices, you can also open SCSS account at select Public/ Private banks. The following are key benefits of opening a Senior Citizen’s Savings Scheme account at authorized banks:
- The accrued interest can be directly credited into the depositor’s savings bank account held with the bank branch
- Standard account statements are forwarded to depositors through post or email
- 24×7 customer service through phone banking services
Popular Banks in India offering SCSS Account Opening Facility
The following is a list of some popular banks offering the facility of opening a Senior Citizen’s Savings Scheme account –
|ICICI Bank||Corporation Bank||State Bank of India|
|Bank of Baroda||Canara Bank||Andhra Bank|
|Syndicate Bank||UCO Bank||IDBI Bank|
|Punjab National Bank||Bank of India||Vijaya Bank|
|Union Bank of India||Dena Bank||Allahabad Bank|
Tax Implications of Senior Citizen Savings Scheme (SCSS)
Investment made in SCSS are also eligible for tax deductions in the following manner:
- The principal amount deposited in SCSS is eligible for a tax deduction of up to Rs. 1.5 Lakh per annum under section 80C of the Income Tax Act, 1961
- Interest on SCSS is taxable as per the tax slab applicable to the person. In case the interest amount earned is more than Rs. 50,000 for a fiscal year, Tax Deducted at Source (TDS) is applicable to the interest earned. This limit for TDS deduction on SCSS investments is applicable from AY 2020-21 onwards.
Premature Withdrawal of SCSS
You have the option of withdrawing your Senior Citizen Savings Scheme Deposit anytime after the date of opening the account but penalties as applicable in such cases. The penalty depends on when you withdraw the amount.
- No interest will be payable and if any interest is paid in the account it will be recovered from principle if an exit from the scheme occurs before completion of 1 year from the date of account opening
- 1.5% of deposit amount deducted as a penalty if an exit from the scheme occurs before completion of 2 years from the date of account opening
- 1% of SCSS deposit deducted as a penalty if an exit from the scheme occurs between 2 years to less than 5 years from the date of account opening
However, note that there are no penalties in case an extended account is closed after 1 year from the date of extension of the account
What happens in case of the accountholder’s demise?
In the event of death of the primary account holder before actual maturity of the account, the account will be closed and all the maturity proceeds will be transferred to the legal heir/nominee. For deceased claims, the nominee or the legal heir will have to fill out a written application in prescribed format along with Death Certificate to facilitate the closure of the account.
Senior Citizen Saving Scheme (SCSS) vs Fixed Deposit
|Features||SCSS||FD (Tax Saver)|
|Interest Rate||7.4% (July-September 2022)||6.5%-7.5% (For Senior Citizens)|
|Maturity Period||5 Year||5 Year|
|Tax Benefits (On Investment)||Yes||Yes|
|Tax Benefits (On Returns)||Taxable||Taxable|
|Premature Withdrawal||Allowed (Anytime after opening but with penalty)||Not Allowed|
How can I open a senior citizen savings schemes account online?
Online application facility is not available for SCSS. In order to open a SCSS account, the customer must visit the post office or bank branch and fill up the related form. The same form should be attached with KYC documents, age proof, ID proof, Address proof and cheque for deposit amount.
Is 80C applicable on senior citizen savings schemes?
Yes, investments made in SCSS are eligible for income tax deduction benefits under the Section 80C of Income Tax Act, 1961.
Can I open a senior citizen saving account with SBI Bank?
Yes, any eligible candidate can open a senior citizen savings account with banks such as the State Bank of India. However, according to SBI’s guidelines, a depositor can hold two or more SCSS accounts only if the deposits in all accounts taken together do not exceed Rs.15 lakh.
What is the maximum age of senior citizen saving account opening?
Any individual, above the age of 60, can open a Senior citizen savings account accompanied by all the required documents.
Can anyone open joint SCSS account with any family member?
A joint SCSS account can be opened by investing maximum Rs.15 lakh (in multiples of Rs. 1,000) only with the spouse.
What is the eligibility criteria of joint senior citizen saving account?
While opening a joint SCSS account, the age of first depositor is supposed to be above 60 years. However, there is no age limit for the second applicant. The joint account can be opened only with the spouse. However, the entire amount in a joint account will be attributable only to the first account holder.