Post Office Senior Citizen Savings Scheme

The Post Office Senior Citizens Savings Scheme (SCSS) is a safe investment option for individuals over 60 years offered by India Post. Since it is a government-backed scheme, the risk involved is minimal, and the returns are higher. 

The benefits include joint application with another eligible individual and tax deductions. Read on to learn more about SCSS and its features.

The Government of India notifies and reviews the interest rates for the Senior Citizen Savings Scheme every quarter. As a result, the interest is subject to change from time to time. At present, the interest rates stand at 8.20% p.a from October to December 2023.

 

Here is a table outlining the different post office schemes and their interest rates for senior citizens. 

Note: The interest rates mentioned above are effective from October 01, 2023, and are subject to change periodically.

The Senior Citizens Savings Scheme Rule of 2019 governs the SCSS Post Office plan. Here are some of the notable characteristics of this scheme: 

• Maturity Period

The Post Office Senior Citizens Savings Scheme has a fixed tenor of 5 years which can be extended further by 3 years with a prescribed form. The application form for the same must be submitted in the fourth year of investment.

 

In the case of the account holder’s demise during the tenor, the account will earn the interest rate applicable on a Post Office Savings Account. However, if it is a joint account, the surviving individual can continue with the account. 

 

To continue with the account, the joint holder must be eligible and must not have an existing SCSS account.

• Premature Closure

You can close the SCSS account at any point in time after opening. However, it will attract a penalty. The amount of penalty varies depending on when you close the account. 

 

1. If you close an account before the completion of 1 year, you will receive no interest. The authorities will recover the interest from the investment amount in case of the prior payment.

2. If you close an account between the 1st and 2nd year, a penalty of 1.5% will be levied on the investment amount.

3. If you close an account between the 2nd and 5th year, the investment amount will attract a penalty of 1%.

• Tax Benefits

You can claim a deduction on your investment in a Post Office SCSS account under Section 80C of the Income Tax Act, 1961. The maximum deduction amount, however, is ₹1.5 Lakhs per financial year.

• Multiple Accounts

An individual can have multiple SCSS accounts, both individually and jointly with another individual. The joint holder need not be a senior citizen. However, despite possessing multiple SCSS accounts, the collective investment in all the accounts must not exceed ₹30 Lakhs.

• Nomination Facility

At any time during the tenure of the scheme, you can appoint a nominee by filing Form C.

Only individuals satisfying the required eligibility criteria can invest in the Post Office Senior Citizen scheme. Here is a quick glimpse of the criteria set by India Post. 

• Applicants must be above 60 years of age. 

• Retired civilian employees aged between 55 years and 60 years. However, such individuals must invest within 1 month from the date of receipt of retirement benefits. 

• Retired defence employees aged between 50 years and 60 years. However, they must also invest within 1 month from the date of receipt of retirement benefits. 

 

For retired civilian and defense employees, invest within 1 month from the date of receipt of retirement benefits. 

 

You can invest in the SCSS scheme in the Post Office individually or jointly. The authorities attribute the investments made in a joint account to the first account holder only.

 

You will be required to submit the following documents when opening a SCSS account -  

• A duly filled and signed account opening form

• A duly filled and signed Know Your Customer (KYC) form

• A copy of your PAN 

• A copy of your Aadhaar card

• A copy of your address proof

• Latest passport-size photograph

• A copy of the document evidencing the disbursal date of your retirement benefits

• A copy of your employer’s certificate mentioning your retirement, VRS or superannuation

Opening a Post Office SCSS account is very easy. All you need to do is to follow the steps mentioned below.  

• Step 1: Visit a post office near you and request the SCSS application form or download it from the official India Post website

• Step 2: Fill in the account opening form with all the required details, including the information of the nominee

• Step 3: Submit the required documents along with the application form along with your original ID for verification 

• Step 4: Get the signature of a witness to complete the process
   

The process of your account activation will take a few days from the date of submission of the application form.

The minimum amount that you can invest in the Post Office SCSS is ₹1,000. On the other hand, the maximum investment amount for the scheme is ₹30 Lakhs as of 2023.