Senior Citizen Saving Scheme – Features, Benefits, Taxation and Opening account

Senior Citizen Saving Scheme (SCSS) in IndiaSenior Citizen Saving Scheme – Features, Benefits, Taxation and Opening account – Updated Apr-2020

Among various investment options available for retired individuals, senior citizen saving scheme(SCSS) is an attractive saving scheme. Senior Citizen Saving Scheme offer 7.4% interest rates currently (Period April, May, June-2020). 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 eligible 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 7.4% interest rates (as of April-2020). 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 7.4% per annum (as on April-2020). This would be reviewed by Govt. of India every quarter 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 KP
Senior Citizen Saving Scheme – Features, Benefits, Taxation and Opening account

Suresh KP


  1. Sir,
    Once the account is opened and interest rate is fixed as prevailing on the date of opening of account, can the interest rate be changed/revised by the Govt. during the 5 years tenure or the interest rate once fixed at the time of opening of account, will remain fixed throughout the 5 years tenure of the account and the same interest amount so fixed will be paid every qyarter.

    1. Kamalji, Happy new year. The interest rate for SCSS is not fixed. e.g. if I have have invested in this scheme, based on the quarterly announcements from ministry of finance the interest amount would keep changing (if any).

      Among small saving schemes, SCSS, PPF, SSA are the 3 schemes where the interest amount would keep changing depending on the interest rate announcement. e.g. my PPF account would keep earning interest based on latest announcements.

      All other schemes, the interest rates is fixed and same which one has opted during investment. e.g. if I invested in PO FD or NSC or KVP, the interest rate is locked (as of the date of purchase) and would not change.

      1. Happy New Year Sir.
        Purpose of my asking this question was that elsewhere in some other analyst’s blogpost, it was mentioned that the interest at the time of entry would remain valid/unchanged throughout not only the initial 5 years tenure but even for the extension of 3 years also.
        I have noticed that many people have this confusion on the validity of entry level interest rate on these two schemes: SCSS and PMVVY.
        My earnest request to you is to detail out these two schemes’ features, particularly on the aspect of validity of entry level interest for the entire tenure of the schemes possibly with some documents in support and a linkage of some GoI’s latest circulars also which I one can go through and draw some comfort on the matter.
        This becomes more important in the current rising interest rate scenario as one may consider the lock-in at the increased interest rate and draw the benefit of it.

        1. Hello Kamalji, Apologies for the confusion.

          1) SCSS interest rate is fixed during the Qtr when the investment is locked. Means, the interest is same throughout the tenure of 5 years

          2) However for PPF and SSA the interest rate is paid based on Qtrly announcements.

          3) Check this link about PPF scheme – (d) interest section – point no.1.

          4) Check this link about SSA scheme – (c) interest section – point no.1 –

  2. I am 82 years old and I want to invest a good sum on fixed deposit. I am not receiving any pension and therefore I am solely dependent on the interest from the fixed deposits
    that I propose to open.

    When enquired with a nationalised bank, I am told that they offer only 6.30 % interest. I understand that there is a provision for higher rate of interest for super senior citizens.
    Could you kindly clarify for me? I look forward to receiving your reply as early as possible.

    Thanks and regards,

    E S Lakshmanan
    Little Kanchipuram

  3. Sir
    I am 54& half year old. I have opted for VRS from a PSU. I will receive the concerned amount in two intallments. First in the last qtr of this FY and the remaning in the first qtr of 2020-21. It is learnt that in case of VRS, I will be elligible for investing in Scss after attaing the age of 55. I will be 55 after May 2020.
    Please clarify whether I will be able to use scss.

    1. Hello Vijay, If you have taken VRS, you are still eligible to invest in SCSS even if you have not attained 60 years of age. However the condition is that within 1 month of receiving such benefit you should open SCSS and invest such money in that account. Pls approach any bank or post office upfront and get the documentation that is required and open SCSS within 1 month.

  4. I opened a scss004 in ICICi bank
    Jaipur which is handled by iInfotech Ltd Mumbai office.Though I submitted 15 G for FY 18-19 in March 18 and for 19-20 IN March 19
    Even they have deducted TDS from Interest of 4thQuarter

    I asked , and their phone nos that on what basis they have deducted the TDS

    None of them are replying and no body is lifting phones

    Please help me where to lodge a complaint against ICICI Bank and their agent I Infotech Mumbai
    Thanking you

  5. Planning ti investment in SCSS in Eligible banks. Unable to get proper info on following from Banks including ICICI Bank
    1. Is TDS now increased for Senior citizens to Rs.50000/-, Is the interest received from SCSS also eligible under Rs 50000/- limit.
    2. Is the interest received from SCSS is eligible under Rs. 50000/- exemption under 80TTB ?
    I need thisinfo from readers urgently. Thanks in advance.

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