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The Senior Citizens Savings Scheme (SCSS) is primarily for the senior citizens of India. It was introduced in the year 2004. The scheme offers a regular stream of income with the highest safety and tax saving benefits. It is an apt choice of investment for those over 60 years of age.
Budget 2025 Update
Withdrawals from Senior Citizens Savings Scheme accounts will be exempt from tax starting August 29, 2024. Senior citizens are predominantly benefitted from this amendment
In this article, we can explore the features, benefits and other relevant details worth considering regarding Senior Citizen Savings Scheme.
Senior Citizen Savings Scheme (SCSS) is a government-backed retirement benefits programme. Senior citizens who are resident in India can invest a lump sum in the scheme, individually or jointly, and get access to regular income along with tax benefits. Since it is a Post Office savings scheme secured by government, the risk involved is less than minimal. Senior citizens can open an SCSS account to get the benefits of the SCSS. They can open an account in a Post Office branch or an authorised bank. This scheme proves to be highly beneficial for senior citizens seeking a steady stream of interest income during their post-retirement years.
The following are the salient features of Senior Citizen Savings Scheme.
SCSS is a government-backed scheme. Hence, the invested amount is secure and there is guarantee of returns upon its maturity.
The interest rates are revised on a quarterly basis. Interest is compounded quarterly. The amount of interest paid differs based on period of deposit, interest rate and principal amount. Use the calculator to know more.
Individuals who open an SCSS account get an interest on the principal deposited amount at the rate fixed by the government. From 01.01.2024, for the first time interest will be payable from the date of deposit to 31st March/30th June/30th September/31st December and thereafter they will receive a quarterly interest against their deposited amount.
Interest payment will be credited to an individual’s account on the first date of April, July, October, and January.
An individual can deposit the money in cash when the amount is below Rs.1 lakh. When the deposit amount is above Rs.1 lakh, an individual should make the payment by cheque.
The maturity period of SCSS is 5 years. However, individuals can extend the maturity period for 3 more years by submitting an application. The application for an extension of maturity should be within one year from the date of maturity.
Individuals can appoint nominees either while opening an SCSS account or after opening the account.
Individuals can open more than one SCSS account. They may open another account either by themselves or a joint account with their spouse. However, joint accounts can be opened only with the spouse, and the initial depositor is the investor who first deposits in the joint account.
The minimum deposit is Rs.1,000 and the maximum is Rs.30 lakh. The deposits can be made in multiples of Rs.1,000.
An SCSS account can be transferred from a post office to a bank and vice versa.
Individuals can withdraw the amount and close the account at any time on an application in Form-2 subject to the following conditions
Multiple withdrawals from an account shall not be permitted.
The following individuals can open a SCSS account with a post office or bank:
PAN and Aadhar numbers are mandatory to open SCSS account from 31st March, 2023.
The current interest rate applicable to SCSS is 8.2% p.a. This interest rate is applicable from 1st April 2024 until 31st March 2025. The interest will be paid on a quarterly basis.
Here is how an SCSS account works:
SCSS Calculator – Senior Citizens Savings Scheme Calculator
Here are a few reasons on why you should invest in SCSS:
You can open an SCSS account either at an authorised bank branch or at a post office branch. If the bank allows, you can open the SCSS account online on the bank’s internet banking portal or mobile banking app. There is no option to open the SCSS account online with the post office.
You can also download the SCSS application form from the India Post website. You need to fill the form and submit it with the authorised post office along with the required documents and pay the deposit to open the account.
You can collect the SCSS application form either at the post office branch or on the official website of the India Post. The process of filling the application form is:
Below are the steps to open a SCSS account with an authorised bank:
Step 1: Go to the nearest authorised bank branch and collect the SCSS application form.
Step 2: Fill in the necessary information on the application form.
Step 3: Attach the required documents.
Step 4: Submit the application form, documents and the deposit money with the bank staff.
Step 5: The bank employees will process the application and open the SCSS account.
The following banks offer SCSS:
Along with these banks, the Post Office also offers SCSS.
All the documents must be self-attested.
Under Section 80C of the Income Tax Act, 1961, individuals are eligible for tax deductions on investments up to Rs.1.5 lakh. If the total interest in all SCSS accounts exceeds Rs.50,000 p.a., TDS will be deducted. If the account is opened by individuals less than 60 years, TDS will be deducted if the total interest exceeds Rs.10,000 per annum.
To sum it up, SCSS is a very good scheme for senior citizens who want a decent risk free return on a corpus fund. At 8.2% p.a. interest rate and an investment amount of Rs.30 lakh, the monthly income is stated to be Rs.20,500 per month for each investor.
Other Articles:
1. Disadvantages of Senior Citizen Savings Scheme
2. Post Office Saving Scheme
3. National Savings Certificate
4. Post Office Scheme To Double Your Money
5. Mahila Samman Saving Certificate Scheme
6. Ponmagan Scheme in Post Office
7. SBI Amrit Vrishti Scheme