The Senior Citizen Savings Scheme (SCSS) is a government-backed initiative designed for individuals aged 60 years and above. This scheme offers attractive interest rates, paid quarterly, providing a steady and reliable income source. SCSS ensures secure savings with minimal risk, making it an ideal option for senior citizens seeking financial stability in their golden years.

Benefits of the SCSS Scheme

Here are the key highlights of this savings scheme for senior citizens:

Features

Details

Rate of Interest 

8.20% p.a. (F.Y 2022-2023)

Tenor

5 years (with a choice to extend it further for 3 more years)

Minimum investment amount

₹1,000

Maximum investment amount

₹30 Lakhs

Benefits

  • Higher interest rates compared to a savings account

  • Tax benefit of up to ₹1.5 lakhs under Section 80C

  • Premature withdrawal is allowed

  • Can be transferred from one post office/bank to another

Penalty for Premature Withdrawal 

  • 1.5% of the deposit if withdrawal is made after the first year but before the second year of opening the account

  • 1% of the deposit if the withdrawal is made after the second year

SCSS Rate of Interest

The SCSS interest rate currently stands at 8.20% p.a. with effect from 01.04.2023. Compared to savings and fixed deposit accounts, the Senior Citizen Savings Scheme comes with similar or better returns. The interest rate is reviewed and paid out quarterly.

 

Please note that the rate of interest is fixed at the time of investment and remains constant during the entire tenure of 5 years.

How Does SCSS Work?

SCSS works in the following manner:

1. Account Initiation

  • Start your SCSS journey by opening an account with a minimum deposit of ₹1,000 or up to a maximum of ₹30 lakhs in a single installment

  • The deposited amount should align with the retirement benefits received and must be deposited within one month from receiving these benefits

2. Retirement Benefits

  • This encompasses various payments due to the account holder upon retirement, including provident fund dues, gratuity, commuted pension value, leave encashment, and more.

  • It's a comprehensive package that reflects the financial rewards earned after years of service.

3. Exceeding the Ceiling

  • If the deposited amount surpasses the ceiling limit, the excess will be promptly refunded to the account holder.

4. Quarterly Interest Payouts

  • Experience the steady growth of your investment as interest on the deposit is credited every quarter.

5. Flexible Interest Withdrawal

  • Enjoy the flexibility in interest withdrawal through auto-credit to your savings account at the same Post Office branch or via ECS.

6. Premature Closure Option

  • Take control of your financial decisions by opting for premature closure at any time after the account opening date.

7. Extension for Continued Benefits

  • Extend the tenure of your SCSS account for an additional 3 years from the date of maturity, providing continued financial benefits.

8. Strategic Extension Window

  • Secure your financial future by choosing to extend the account within 1 year from the maturity date.

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List of Banks Offering SCSS

The following is a list of banks that offer the Senior Citizen Savings Scheme:

  1. State Bank of Hyderabad

  2. Syndicate Bank

  3. United Bank of India

  4. UCO Bank

  5. Punjab National Bank

  6. Indian Overseas Bank

  7. State Bank of Bikaner & Jaipur

  8. State Bank of Mysore

  9. Oriental Bank of Commerce

  10. State Bank of India

  11. Canara Bank

  12. Bank of India

  13. State Bank of Patiala

  14. IDBI Bank Ltd.

  15. Corporation Bank

  16. State Bank of Travancore

  17. Allahabad Bank

  18. Vijaya Bank

  19. Central Bank of India

  20. Dena Bank

  21. Bank of Baroda

  22. Indian Bank

  23. Bank of Maharashtra

  24. ICICI Bank Ltd.

  25. Union Bank of India

  26. Andhra Bank
     

Please note that the SCSS interest rate i.e. 8.20% p.a. remains the same across all the banks mentioned above.

How to Open an SCSS Account

This scheme is not available on Bajaj Markets. However, you can open a Senior Citizens Savings Account in two ways: 

Online

  1. Request the authorities at the Post Office to allow you access to e-banking and mobile banking

  2. Visit the official e-banking website once you have unlocked e-banking facilities

  3. Enter the code sent to you 48 hours after placing your request

  4. Search for the ‘New User Activation’ option on the page and complete your registration process

 

There, you may initiate the process of opening your Senior Citizens Savings Account. 

Offline

  1. Visit the post office nearest to you

  2. Take all necessary documents with you

  3. Request for the opening of a Senior Citizens Savings Account

  4. Fill out the form given 

  5. Submit the duly filled form and attach your documents with it

Eligibility Criteria for Senior Citizen Savings Scheme

The category of individuals listed below are qualified for the Senior Citizen Savings Scheme:

  • Individuals who are 60 years old or above

  • Individuals between 55 and 60 years who have retired early due to superannuation or Voluntary Retirement Scheme (VRS) regulations

  • Retired members of the armed forces, provided they have met all other requirements

Documents Required to Open an SCSS Account

While your PAN card is mandatory for opening an SCSS account, here is the list of other documents required to open an SCSS account.

  • Proof of identity and address:

    1. Aadhaar Card

    2. Passport

    3. Driving licence 

    4. Voter ID card

    5. NREGA job card attested by State Government officer

 

In case you are under 60 years of age:

  • An employer’s certificate mentioning details of retirement on superannuation or otherwise. It should also include the details of retirement benefits and employment period 

  • The proof of date will also be required to show the disbursal of retirement benefits

Tax Implications of SCSS

Investments made in SCSS are eligible for tax deductions. Here is how:

  • Under the Income Tax Act of 1961 Section 80C, the principal amount deposited in the SCSS is entitled to a tax deduction of up to ₹1.5 Lakhs each year.

  • The tax rate applicable to the individual is based on the interest earned. If the total amount of interest earned for a fiscal year exceeds ₹50,000, Tax Deducted at Source (or TDS) is applicable to the earned interest.

Premature Withdrawal of SCSS

Here are the different conditions of premature withdrawals:

  • If the account is closed within one year, no interest will be paid. Also, any interest that has been paid will be deducted from the account's principal amount.

  • If the account is closed within two years, 1.5% of your deposit will be charged as a penalty.

  • If the account is closed between 2 to 5 years, 1% of the deposit amount will be charged as a penalty.

 

Please note that there are no penalties applicable if an extended account is cancelled more than a year following the account's extension.

What Happens in the Case of the Account Holder's Demise?

In case of the demise of an SCSS account holder, the account will be closed and the entire maturity proceeds will be given to the designated legal heir or beneficiary.

 

To expedite the account's closure for deceased claims, the legal heir or the nominee must submit a written application in the required format together with a copy of the death certificate.

Disclaimer

The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial investment advice or endorsement of any sort.

The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products. 

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Frequently Asked Questions

What is the maximum amount you can deposit under SCSS?

The maximum amount you can deposit under the SCSS scheme is ₹30 Lakhs.

How to open an SCSS account online?

There is no online application option for the SCSS scheme. The customer must complete the necessary paperwork in person at a post office or bank branch to start an SCSS account. The form, along with proof of KYC, age, identity, and address, as well as a cheque for the deposit amount, must be submitted.

What is the Senior Citizen Savings Scheme interest rate?

Currently, SCSS offers an interest rate of 8.20% p.a.

Can an SCSS account be extended?

Yes, you may extend your SCSS account for an additional three years within a year of maturity.

Can an SCSS account be transferred from one deposit office to another?

An account may be moved from one deposit office to another by using Form G.

How many accounts can be opened under SCSS by a senior citizen?

A senior citizen can potentially hold multiple SCSS accounts, but there are some key limitations to consider:

  • Maximum Deposit Limit: The total deposit across all SCSS accounts for a single individual cannot exceed ₹30 Lakhs

  • Single Branch Restriction: You cannot open more than one SCSS account in the same deposit branch within a calendar month

  • Account Type: Joint accounts with a spouse are permitted under SCSS, but the combined deposit still adheres to the ₹30 Lakh limit

 

In essence, while you can technically open multiple accounts, the total deposit across all of them must be under ₹30 Lakhs. In some cases, the maximum deposit limit might be lower depending on the amount received as retirement benefits.

Is the joint account facility available under SCSS?

Yes, the joint account facility is available under the Senior Citizen Savings Scheme (SCSS). However, there are a few things to keep in mind:

  • Account Holder Eligibility:  Only a spouse can be a joint account holder in an SCSS account

  • Deposit Limit Applies: The total deposit amount (across both individuals)  still needs to be within the overall limit of ₹30 Lakhs

  • Benefits Go to First Depositor: The entire investment amount and interest earned are attributed to the first account holder (the one who deposits initially)

 

Overall, while a spouse can be a joint account holder for convenience, the financial benefits are primarily directed towards the first depositor who meets the eligibility criteria (being a senior citizen above 60 years old).

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