Budget 2023 Latest Update: The maximum deposit for senior citizen saving scheme has been increased from Rs 15 lakhs to Rs 30 lakhs.
The Senior Citizens Savings Scheme (SCSS) is primarily for the senior citizens of India. 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.
A Senior Citizens’ Saving Scheme (SCSS) is a government-backed retirement benefits programme. Senior citizens resident in India can invest a lump sum in the scheme, individually or jointly, and get access to regular income along with tax benefits. It is a Post Office savings scheme. 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.
Senior Citizen Savings Scheme (SCSS) | Particulars |
Tenure | 5 years |
Interest Rate | 8.2% p.a. |
Minimum Investment | Rs 1,000 |
Maximum Investment | Rs 30,00,000 |
Tax Benefits | Available under Section 80C upto Rs.1.5 lakh |
Premature Closure | Available |
Nomination Facility | Available |
SCSS is a government-backed scheme. Hence, the invested amount is secure and there is guarantee of returns upon its maturity.
Individuals who open an SCSS account get an interest on the principal deposited amount at the rate fixed by the government. 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 in 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 extension of maturity should be given in the 4th year.
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.
The minimum deposit is Rs.1,000 and the maximum is Rs.30 lakh. The deposits can be made in the 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 after one year of opening the account. There is no charge for premature closure of the account within one year of opening it. However, a 1.5% charge will be deducted from the principal amount if the account is closed after one year but within two years of opening it. A 1% charge will be deducted from the principal amount if the account is closed after two years but within five years of opening it.
The following individuals can open a SCSS account with a post office or bank:
The current interest rate applicable to SCSS is 8.2% p.a. This interest rate is applicable from 1st Jan 2024 until 31st March 2024. 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. In the case the interest amount is more than Rs.50,000 p.a., TDS will be deducted.
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.