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Complete guide on Senior Citizen Saving Scheme (SCSS)

Senior Citizen Saving Scheme (SCSS) in IndiaComplete guide on Senior Citizen Saving Scheme (SCSS) – Updated May-2017


Among various investment options available for retired individuals, senior citizen saving scheme(SCSS) is an attractive saving scheme. Senior Citizen Saving Scheme offer 8.4% interest rates currently. What is Senior Citizen Saving Scheme (SCSS)? Who is eligible to open Senior Citizen Saving Scheme (SCSS) in India? In this article, I would touch upon key features of this scheme, who is eligble to open this scheme, whether withdrawal’s are permitted or not and how to open SCSS in India?

What is Senior Citizen Saving Scheme (SCSS)?


Senior Citizen Saving Scheme is a Govt. of India product for Senior Citizens of above 60 years which offers 8.4% interest rates. Since safety is most important point for senior citizens and this is a scheme offered by Govt. of India, it is safe investment option for Senior Citizens which offers highest interest rates.

Also Read: Do you know that New Pension Scheme (NPS) Scores high compared to EPF/PPF?

Who can open Senior Citizen Saving Scheme (SCSS) in India?


a) Following individuals can open SCSS scheme in India.

  • Any individual who attained 60 years and above can open SCSS.
  • Individual who has attained the age of 55 years or more but less than 60 years, and who has retired, can open the account within a month of the date of receipt of the retirement benefits and proof of date of disbursal of such retirement benefit(s) along with a certificate from the employer.
  • Retired personnel of defence services irrespective of age limit can open this account with certain conditions.

b) NRI’s and HUF’s cannot open SCSS scheme.

Where can we open Senior Citizen Saving Scheme?


Govt. of India has authorized all nationalized banks, post office and ICICI Bank where you can open this scheme. ICICI Bank is the only private sector bank allowed to open SCSS.

What are the features of Senior Citizen Saving Scheme?


  • Eligible Senior Citizen can open this account in individual capacity or jointly with spouse.
  • Eligible Senior Citizen can open multiple SCSS accounts with various banks. However maximum total deposit cannot exceed Rs 15 Lakhs.
  • Current interest rate is 8.4% per annum (as on May-2017). This would be reviewed by Govt. of India every year and can modify the rate.
  • Interest would be calculated and credited by end of the calendar quarter i.e. on 31st March, 30th June, 30th September and 31st December.
  • Tenure of SCSS is 5 years. Depositor can extend this for 3 more years upon request.

Are there any penalty to withdraw amount from SCSS before maturity?


  • No withdrawals are permitted within 1 year.
  • If one want to withdraw after 1 year, but before 2 years, 1.5% of the deposit amount would be deducted as penalty.
  • If one want to withdraw after 2 years, but before maturity of 5 years, 1% of the deposit amount would be deducted as penalty.

Also Read: Complete Review of LIC’s 9% Varishta Pension Bima Yojana Scheme

What are the tax benefits available for Senior Citizen Saving Scheme?


There is no wealth tax on SCSS. However interest on SCSS is taxable. Senior citizens need to pay income tax on this interest as per income tax applicable to them. Banks would deduct TDS as per their rules ( (a) 10% if you submit PAN card and 20% without PAN card and (b) Zero tax if you submit Form 15H for senior citizen).

How to open Senior Citizen Saving Scheme in India?


Eligible Senior Citizens can approach any nationalised bank or post office or ICICI Bank and need to fill the SCSS application form and submit self attested age proof document along with receipt of disbursal proceeds which he/she would have received from his employer etc., Age proof document could be Passport, DOB certificate, voter ID card, PAN card, Ration card, Driving license etc.,

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Suresh
Complete guide on Senior Citizen Saving Scheme

The Author

Suresh KP

Suresh KP i.e. me have written 1,500+ articles on this blog. I love doing analysis on various Best Investment Plans like mutual funds, Stocks, IPO's, NCD Bonds, Insurance products. If you like our blog, you can share some of the good articles on your Facebook or Twitter. This would be the BIGGEST gift which you would be giving to us.

20 Comments

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  1. Is there a minimum amount for investment in SCSS. I approached sbi and post office and they said that minimum one lakh must be invested. But this is not written in documents that I get in Internet on SCSS. I thought any multiple of thousand was okay for the scheme upto 15 lakhs. Any advice will be helpful

  2. Can I take loan against it ?

  3. What happens when the depositor expires?  Nominee gets the amount without preclosure charges?

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