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

    I have one SCSS aacount in individual name and other in joint name with my wife.Total amount is 15 L.

    my query is can my wife who is a senior citizen open SCSS account in her name .will interest income clubbed for income tax or not.Pl advice soon


  2. If I invest 15 lakh in a nationalised bank in SCSS and assume that bank goes bankrupt or amalgamated then what happens to my money.? Is it still safe?

    1. Hi Shashikant, If you invest in nationaliased bank, it is immateria whether bank goes bankrup. You would still get your money. Also amalgamation to another bank, it would not have any impact whether it is nationalised bank or private banks.

  3. If the interest on SCSS is taxable, then net receivable (7.56% after TDS deduction) is almost what we get in FD (7.5% for senior citizens without TDS). Also, current 8.4 % would be reviewed by government time to time and it may come down in future.

    Request you to clarify my doubt and advice.

    1. Hi Renganathan, There is no “FD for Senior Citizen without TDS”. This is taxable in the hands of Sr. Citizens. If their income is taxable, they need to pay tax based on income tax slab. It is immaterial whether it is bank FD or post office FD scheme.

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