Senior Citizen Savings Scheme (SCSS)

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.

Senior Citizen Savings Scheme (SCSS) Highlights
Interest Rate	8.2% per annum (Q1 FY 2023-24)
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
Benefits	Safe and reliable investment High returns as compared to FD or Savings Account Tax benefit up to Rs. 1.5 Lakh
Premature Withdrawal Penalty	1.5% of the deposited amount if withdrawn before the completion of 2 years 1% of the amount on withdrawing after the completion of 2 years

SCSS Interest Rate

Senior Citizen Savings Scheme (SCSS) interest rates for the first quarter (April-June) of FY 2023-24 is 8.2% 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)
January to March (Q4 FY 2022-23)	8
October to December (Q3 FY 2022-23)	7.6
July to September (Q2 FY 2022-23)	7.4
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

Aadhaar and PAN Now Mandatory for SCSS Account

• As per the recent notification issued by the Ministry of Finance, you need to mandatorily provide your Aadhaar number and PAN to open a new SCSS account. If you have not been assigned an Aadhaar, you need to provide proof of application of enrollment for Aadhaar or enrollment ID at the time of account opening and furnish the Aadhaar number to the Accounts Office within 6 months from the date of account opening.
• In case you already have an existing SCSS account and have not submitted your Aadhaar number, you need to do so within a period of 6 months with effect from 1st April 2023. Moreover, in case you have not submitted your PAN at the time of opening the account, you need to submit the same within a period of 2 months from the date of happening of any of the following events, whichever is earliest, namely:

– The balance at any given time in the account is more than Rs. 50,000

–  The aggregate of all credits in the account in any financial year exceeds Rs. 1 lakh

–  The aggregate of all withdrawals and transfers in a month from the account is more than Rs. 10,000

• Failure to submit Aadhaar within the specified period of 6 months and PAN within the specified period of 2 months will lead to the account becoming inoperational until the Aadhaar number and/or PAN is submitted to the accounts office

Note: We have taken this information from The Gazette of India. To read more, click on https://egazette.nic.in/WriteReadData/2023/244822.pdf

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 8.2% 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.

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	8.2% (April-June 2023)	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

FAQs

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.

What should I keep in mind before opening a SCSS account?

Before you open a Senior Citizen Savings Scheme account, you should provide all the necessary information and relevant documents that have been requested. However, in case the information provided by you is false or incorrect, your account will be closed immediately. The deposited amount will be refunded to you after deduction of interest that has already been paid.

How many accounts can be opened under SCSS?

You can deposit money in your SCSS account only in a single payment. Thus, as an account holder you can operate more than one account under the scheme subject to the condition that the deposits in all the accounts taken together shall not exceed the maximum limit of Rs. 15 lakh. Moreover, more than one SCSS account cannot be opened in the same deposit branch during a calendar month.

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.