Senior Citizen Saving Scheme is wonderful scheme for senior citizens of India.
SCSS is a five year Government-sponsored saving scheme for individuals of age of 60 and above. The Government of India introduced this scheme in 2004, intending to provide regular and steady income to senior citizens in India.
SCSS account offers competitive interest rate of 8% per annum to senior citizens. It is 100% safe scheme as it is backed by GOI.
Any Indian citizen 60 or above can buy SCSS Scheme through post office, PSU banks or and private banks also.
Table of Contents
How does SCSS work?
Initially, you deposit a lump sum amount. You get tax deduction up to Rs 1,50,000 under section 80C for the very first year only( no deduction if you do not deposit further).
Thereafter you will receive interest every quarter. Your principal amount is returned back to you after completion of 5 years.
Features of Senior Citizen Saving Scheme
- This scheme is exclusively meant for senior citizens of India.
- SCSS is a Government backed scheme therefore 100% safe.
- SCSS account offers guaranteed fixed rate of return and regular income to the people
Eligibility Conditions SCSS for Senior Citizen
- Any Indian resident age 60 or above can open the account
- Individual between age 55 to 60 and who is retired on superannuation or under VRS (voluntary retirement)can also open the account
- Personnel of Defence Services (excluding civilian defence employees) of age 50 or more can also open the account.
- HUF and NRI can not open the SCSS account.
- You can open joint account with spouse only.
- The first depositor in the joint account is the investor.
- You can open one or more account either individually or jointly with spouse subject to maximum limit of Rs 15 lac only.
Where can you open SCSS Account
you can open the account in any post office, PSU banks or private banks.
List of banks which offer SCSS accounts
- Andhra Bank
- Bank of India
- Bank of Maharashtra
- Allahabad Bank
- Punjab National Bank
- Indian Bank
- Indian Overseas Bank
- United Bank of India
- Corporation Bank
- Canara Bank
- Dena Bank
- Syndicate Bank
- Central Bank of India
- UCO Bank
- Union Bank of India
- ICICI Bank
- Axis Bank
- HDFC Bank
How do you open the SCSS account?
You can pay up to Rs 1 lac in cash and open the account otherwise you can deposit a cheque or demand draft.
The cheque realisation date is considered as the account opening date.
Deposit limits in Senior Citizen Saving Scheme/SCSS
- Minimum deposit amount is Rs 1000 and in multiple of Rs 1000
- The SCSS deposit Limit is Rs 30 lac ( maximum ) earlier this limit was 15 lac.
Maturity Period of SCSS
Senior Citizen Saving Scheme get matures after completion of 5 year. However, you can extend it further for next 3 years.
SCSS Calculator
SCSS interest rate
The current Senior Citizen Saving Scheme interest rate is 8%. The interest amount is paid on quarterly basis.
SCSS interest is paid at the end of calendar quarter
31st March
30th June
30th September
31st December
The interest rate will remain same throughout the tenure of SCSS.
The interest rate will not change even if there are changes in the interest rate thereafter.
How to receive the interest credit
You can receive quarterly interest rate in one of the following ways:
The interest can be credited into your savings account present in the same bank or post office.
Postdated cheques or money order
However, direct interest credit to your savings bank account is easiest way.
SCSS Extension Period
You can extend SCSS account for further 3 years but within one year of maturity by giving an application form.
Premature closure of account at any time, after one year of extension without any deduction.
Premature Closure of SCSS Scheme
You can close SCSS account prematurely after completion of one year.
After completion of 1 year – Penalty of 1.5% of deposit amount if After completion of 2 year – Penalty of 1% of deposit amount
and you will receive the remaining amount.
Example: Mr. Satish deposit Rs 10 lac and he decides to close his account after completion of one year.
Then as penalty he will have to pay Rs 10 lac*1% =Rs 15000
If he takes money back after completion of 2 year than he will pay Rs 10000.
Nomination Facility
Nomination facility is available. You can nominate either at the account opening time or after opening but before maturity.
Frequently Asked Questions
What is the interest rate of senior citizen Saving Scheme?
The current interest rate of Senior Citizen Saving Scheme is 8% per annum.
Which bank is best for senior citizen Saving Scheme ?
Senior citizen saving scheme offered by Indian post office. Furthermore,you can avail scheme to some of the designated banks also.
It does not matter that from where you purchase SCSS scheme. But still this will remain Government sponsored scheme always.
Opening SCSS scheme through banks may get you some additional advantages such as:
- You can directly transfer funds to your SCSS account, if you have savings bank account in the same bank.
- Direct interest transfer to your bank account. Moreover, you also get money transfer notification from your bank through SMS and account statement.
- In addition you may also get online banking facility from your bank, which is not available with post office.
- Moreover ,Can also initiate withdrawal request online without any hassle.
Is SCSS interest taxable?
SCSS interest is fully taxable in hand of recipient. TDS is also applicable, if interest amount is more than 50000 in a financial year. The interest income up to Rs 50000 is not taxable for senior citizens.
What is the benefit of SCSS?
SCSS Account has everything that a senior can ask for.
Senior Citizen Saving Scheme offers you principal security, fixed income and return back of your principal amount after completion of 5 years.
Additionally, you also get income tax deduction in the year you deposit money.
How much interest is tax free for senior citizens?
Interest income up to Rs 50000 is tax free for senior residents of India.
Is TDS applicable to senior citizens savings scheme?
TDS is applicable on SCSS account on income above Rs 50000 in a Financial Year. But if your income is below taxable limit, then you can deposit form 15H. Certainly you have to deposit this form each financial year to avoid tax.
Is SCSS interest rate fixed?
The interest rate remains fixed for a buyer.
For an example,
Mr. Gupta invested in senior citizen Saving Scheme in 2017.
The interest rate was 8.5 percent at that time and now the current in interest rate is 7.4 percent.
Here, the interest rate of 8.5 % will remain same for Mr. Gupta. There will be no change in interest rate for him.
For new buyer new interest rate will be applicable.
