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Senior Citizen Savings Scheme (SCSS)
The SCSS, or Senior Citizen Savings Scheme, is a government-backed savings option designed to provide financial security to seniors aged 60 years and above. Currently, SCSS provides an interest rate of 8.20% p.a. (Q4 FY 2024-25). The regular flow of income, the safety of investment, and tax benefits are some of the attractive benefits of the SCSS scheme.
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- Senior Citizen Savings Scheme (SCSS)
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Let us have a detailed overview of this old-age savings scheme in this article.
What is the Senior Citizen Saving Scheme (SCSS)?
The Senior Citizen Savings Scheme (SCSS) is a retirement benefit scheme backed by the Indian government. It's designed to provide financial security to senior citizens by offering a safe investment option with a guaranteed interest rate. SCSS scheme allows individuals aged 60 and above (or 55 for retired defense personnel and those taking voluntary retirement) to invest a lump sum amount. The scheme offers several benefits, including regular interest payouts, tax deductions on the investment amount, and a high degree of security due to government backing. You can open an SCSS account at designated post offices and authorized banks. SCSS is one of the best tax-saving investment plans for senior citizens.
Features of the Senior Citizen Saving Scheme
The key features of the SCSS scheme are:
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High Interest Rates: SCSS offers competitive and fixed interest rates on the deposit amount. The current rate (as of May 24, 2024) is 8.2% per annum.
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Government Guaranteed: Government-backed scheme, ensuring high safety and security.
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Tax Benefits: Deposits qualify for tax deduction under Section 80C of the Income Tax Act, up to a limit of Rs. 1.5 lakh per year.Â
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Tenure: Maturity period is 5 years. It can be extended for 3 more years after maturity.
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Minimum and Maximum Investment: Minimum deposit amount is Rs. 1,000, maximum is Rs. 30 lakh.Â
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Multiple Accounts: Individuals can open more than one SCSS account, either solely or jointly with their spouse.
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Easy Account Opening: Can be opened at any authorized bank or post office in India.
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Transferable Accounts: SCSS accounts can be transferred between banks and post offices.
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Premature Closure: Premature closure is allowed under certain conditions, but a penalty may apply.
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Quarterly Interest Payments: Interest earned on the deposit is paid quarterly.
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Nomination Facility: You can nominate a beneficiary to receive the account balance in case of your demise.
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Premature Withdrawal: Permitted (under exceptional circumstances)
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Withdrawal Allowed After 1 Year: Some penalty
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Withdrawal Between 1-2 Years: Penalty of 1.5% of the deposit amount
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Withdrawal Between 2-5 Years: Penalty of 1% of the deposit amount
**Note: The maximum deposit limit increased from Rs. 15 lakhs to Rs. 30 lakhs from 01 April 2023
Eligibility Criteria of the Senior Citizen Saving Scheme
To be eligible to buy the senior citizen savings scheme, the applicant needs to fulfill the following criteria:
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Individuals aged 60 years or above on the account opening date.
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Individuals who retired under superannuation, VRS, or special VRS between 55 and 60 years. Investment must be made within three months of receiving retirement benefits.
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Ex-servicemen aged 50 to 60 years can invest. Investment must be made within three months of retirement benefit receipt.
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Non-resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not eligible for SCSS.
Benefits of the SCSS Scheme
Senior Citizen Saving Scheme is a savings and investment instrument—the best investment option for elderly and retired individuals. Below are some benefits of the Senior Citizen Saving Scheme:
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Safety and Security: SCSS scheme is a government-backed scheme, making it one of the safest investment options for senior citizens.
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High Interest Rates: SCSS offers competitive interest rates compared to other savings options. The current interest rate for SCSS is 7.4% per annum (as of the April-June 2024 quarter).
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Tax Benefits: Deposits made in SCSS are eligible for tax deduction under Section 80C of the Income Tax Act, up to a limit of Rs. 1.5 lakh per year.
SCSS Interest Rate
The Senior Citizen Saving Scheme interest rate is currently set at 8.2% annually, effective from April 1, 2024, to March 31, 2025. Interest payments are made quarterly.
| Time Period | Interest Rate (% annually) |
| April to June (Q1 FY 2024-25) | 8.2% |
| January to March (Q4 FY 2023-24) | 8.2% |
| October to December (Q3 FY 2023-24) | 8.2% |
| July to September (Q2 FY 2023-24) | 8.2% |
| April to June (Q1 FY 2023-24) | 8% |
| January to March (Q4 FY 2022-23) | 8% |
| October to December (Q3 FY 2022-23) | 7.6% |
| July to September (Q2 FY 2022-23) | 7.4% |
| April to June (Q1 FY 2022-23) | 7.4% |
| Jan to Mar (Q4 FY 2021-22) | 7.4% |
| Oct to Dec (Q3 FY 2021-22) | 7.40 |
| Jul to Sep (Q2 FY 2021-22) | 7.4% |
| April to June (Q1 FY 2021-22) | 7.4% |
| Jan to March 2021 (Q4 FY 2020-21) | 7.4% |
| Oct to Dec 2020 (Q3 FY 2020-21) | 7.4% |
| Jul to Sep 2020 (Q2 FY 2020-21) | 7.4% |
| Apr to Jun 2020 (Q1 FY 2020-21) | 7.4% |
| Jan to March (Q4 FY 2019-20) | 8.6% |
| Oct to Dec 2019 (Q3 FY 2019-20) | 8.6% |
| Jul to Sep 2019 (Q2 FY 2019-20) | 8.6% |
| Apr to Jun 2019 (Q1 FY 2019-20) | 8.7% |
| Jan to March 2019 (Q4 FY 2018-19) | 8.7% |
| Oct to Dec 2018 (Q3 FY 2018-19) | 8.7% |
| Jul to Sep 2018 (Q2 FY 2018-19) | 8.3% |
| Apr to Jun 2018 (Q1 FY 2018-19) | 8.3% |
| Jan to March 2018 (Q4 FY 2017-18) | 8.3% |
| Oct to Dec 2017 (Q3 FY 2017-18) | 8.3% |
| Jul to Sep 2017 (Q2 FY 2017-18) | 8.3% |
| Apr to Jun 2017 (Q1 FY 2017-18) | 8.4% |
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product an insurer offers.
How Does the Senior Citizen Saving Scheme Work?
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Open an SCSS account with a single instalment by contributing from Rs. 1000 up to Rs. 30 lakh.
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Deposit the amount within 1 month from the date of receiving a retirement benefit from the employer.
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Retirement benefits include gratuity, leave encashment, and provident fund dues, among others.
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Excess deposit over the ceiling amount is refunded immediately to the account holder.
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Interest is credited once every quarter.
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Interest withdrawal options include ECS or auto credit mode through the post office.
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Accounts can be closed prematurely after the opening date.
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Extend the account for another three years from the date of maturity.
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Extension can be done one year at a time from the date of maturity.
Senior Citizen Saving Scheme Application ProcessÂ
The Senior Citizen Savings Scheme (SCSS) offers benefits to retirees. Here's how to apply:
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Visit a participating bank or post office.
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Collect and fill out the SCSS application form.
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Attach KYC documents (ID, address proof).
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Submit the form with an initial deposit (cheque preferred).
Note: Applications cannot be made online.
Process to Open an SCSS Account at the Post Office
An Senior Citizen Saving Scheme Account can be opened by filling out the application form at the post office with these 2 methods:
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Access the form from the nearest Post Office branch
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Download the application form from the official India Post website
Steps to fill out the SCSS application with the Post Office:
Step 1: Get the application from the nearby Post Office branch or download it from India Post's official website.
Step 2: Enter the Name of the Post Office Branch, Post Office Savings Account Number (if any), Post Office branch address (under the “TO” column).
Step 3: Paste the passport-sized photographs of the applicant(s).
Step 4: Fill in the applicant’s name in the required space and tick-mark on the “SCSS” option. Tick on the “Additional Facilities Available” option if you want to open a Savings Account.
Step 5: Select the category of SCSS account holder:
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Self
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Minor Child (through a guardian)
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Person of Unsound Mind(through a guardian)
Step 6: Select the type of SCSS account:
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Single
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Joint
Step 7: In the next section, enter the SCSS deposit amount in figures and words.
Step 8: Enter the cheque number and date of depositing the amount through a cheque.
Step 9: Enter the credentials of the applicant(s).
Step 10: Checkmark the SCSS Declaration and enter the details in the provided space.
Step 11: Sign the application at the required places by all the applicant(s).
Step 12: Mention the name and details of the SCSS account nominee with their signature.
Process to Register Senior Citizen Saving Scheme Account at Banks
The facility to open an SCSS account is also available at various public/private sector banks.Â
Steps to open an SCSS Account with the Banks:
Step 1: Collect the application form by visiting the nearest branch of the authorised banks
Step 2: Enter the necessary details in the required spaces
Step 3: Attach the necessary proofs and documents
Step 4: Pay the deposit amount and receive the payment receipt
Step 5: Duly sign and submit the filled application form
Step 6: The employees at the bank will process the application and open an SCSS account immediatelyÂ
Banks Offering Senior Citizen Saving Scheme
Apart from the post offices, the Senior Citizen Savings Scheme is also offered by selected banks in the country. Below mentioned are the banks offering the Senior Citizen Saving Scheme:Â
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Public Sector Banks:
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Allahabad Bank (merged with Indian Bank)
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Andhra Bank (merged with Union Bank of India)
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Bank of Maharashtra
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Bank of Baroda
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Bank of India
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Canara Bank
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Central Bank of India
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Dena Bank (merged with Bank of Baroda)
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Indian Bank
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Indian Overseas Bank
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Oriental Bank of Commerce (merged with PNB)
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Punjab National Bank
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State Bank of Bikaner & Jaipur (merged with SBI)
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State Bank of Hyderabad (merged with SBI)
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State Bank of India
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State Bank of Mysore (merged with SBI)
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State Bank of Patiala (merged with SBI)
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State Bank of Travancore (merged with SBI)
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Syndicate Bank (merged with Canara Bank)
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UCO Bank
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Union Bank of India
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United Bank of India (merged with PNB)
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Vijaya Bank (merged with Bank of Baroda)
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Private Sector Bank:
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ICICI Bank
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Documents Required for SCSS Account Opening
Below are the documents required to open a Senior Citizen Saving Scheme account
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Mandatory (KYC):
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2 Passport Photos
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Identity Proof (1 of): PAN, Aadhaar (mandatory), Passport, Voter ID
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Address Proof (1 of): Aadhaar, Landline/Electricity/Water Bill (within 3 months), Ration Card, Passport, Bank Statement
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Additional (if applicable):
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Age Proof (if Aadhaar/PAN not used for ID/Address): Birth Certificate, Voter ID, Senior Citizen Card, Passport, Employer Certificate (if <60).
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Tax Benefits Under the Senior Citizen Savings Scheme
The Senior Citizen Savings Scheme (SCSS) offers tax benefits under Section 80C of the Income Tax Act. You can deduct up to Rs. 1.5 lakh invested in SCSS from your taxable income each year, but this deduction applies to the total amount invested under Section 80C, which includes other investments like PPF and ELSS. The interest earned on SCSS is taxable as per your income tax slab, but there's no Tax Deducted at Source (TDS) on this interest income unless your total interest income from all sources exceeds Rs. 50,000 in a financial year.
FAQs
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Can an SCSS account be extended?
Yes, it is possible to extend an SCSS account within one year after maturity, allowing the depositor to extend it for a period of three years. -
Is TDS applicable to the SCSS scheme?
Yes, TDS is applicable if the interest exceeds Rs. 10,000 per annum. Interest payments under this scheme are not exempt from tax deduction at source. -
Can the SCSS account be transferred from one deposit office to another?
Yes, an SCSS account can be transferred from one deposit office to another using Form G. -
Is any income tax rebate/exemption admissible?
No, there are no income tax rebates or exemptions applicable to this scheme. -
Can both spouses open separate accounts?
Yes, individual accounts can be opened by both spouses, provided that the maximum deposit limit does not exceed Rs. 15 lakh each. However, it must comply with the scheme's regulations. -
What will be the share of the joint account holder in the deposit in an account?
The entire amount is attributed to the first depositor or applicant. The addition of a spouse as a joint account holder does not affect this allocation.
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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.
#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%
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**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).
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