SCSS, short for Senior Citizen Savings Scheme is a government-sponsored savings instrument for individuals above the age of 60. The Government of India introduced this scheme in 2004 intending to provide senior citizens with a steady and secure source of income for their post-retirement phase.
It is one of the most lucrative savings schemes in India and offers comparatively substantial returns to its subscribers. Furthermore, it is a government-backed scheme, and hence, the risk of capital loss is negligible. Individuals can apply for SCSS through post offices as well as public & private banks.
Features of the Senior Citizen Savings Scheme
The characteristics of SCSS are discussed below –
Quarterly Revision of Interest Rates
The interest rate offered under the Senior Citizen Savings Scheme is revised every quarter, and its derivation depends on several factors such as the prevalent rates in the market, inflation level, etc. Due to stagnant economic conditions or no significant change in it, rates might remain the same after revision.
Fixed Income
The interest rate declared during the time of investment remains fixed throughout the maturity tenure and is not affected by alterations in a later quarter.
Minimum and Maximum Deposit
Eligible individuals require making a minimum deposit of Rs. 1,000 to open an account under the Senior Citizen Scheme. At the same time, the deposit quantum is capped at Rs. 15 Lakh or the amount received as a retirement benefit, whichever is lower.
For example, if an individual receives Rs 10 Lakh as a retirement benefit, he can invest up to that amount in the scheme. This clause applies irrespective of whether the account is held individually or jointly. However, one can only open a joint account with his/her spouse.
Also, if an individual holds multiple accounts under this scheme, the total amount deposited in all such accounts shall not exceed the maximum limit.
Maturity Tenure
The maturity period for the SCSS scheme is 5 years. It can be extended for another 3 years, effectively bringing up the period to 8 years. If an individual is willing to extend such a period by 3 years, he/she shall submit Form B after duly filling it. An extension is allowed only once. Upon extension, however, interest rates applicable at that quarter would apply.
For instance, an individual deposited Rs. 7 Lakh under SCSS in April 2012, when the interest rate offered was 9.3%. However, when she extended this scheme in April 2017, the interest rate she was eligible to earn stood at 7.4%.
Premature Withdrawals and Account Closure
An individual can withdraw prematurely from their account under Sr. Citizen Savings Scheme one year after account opening. If an individual closes their account before the completion of 2 years, 1.5% of the deposited amount will be deducted as a penalty.
If account closure takes place after the completion of 2 years, 1% of the deposited amount is levied as a penalty. In the case of extended accounts, an individual can close their account after the first year without incurring any penalty.
For instance, if Mr Shah deposited Rs. 5 Lakh in the Senior Citizen Savings Scheme on 1st March 2019 and closed it on 6th February 2021, he would have had to bear a penalty of Rs. 7500. However, if the investor is deceased before the maturity of their account, no penalty will be charged.
Quarterly Disbursal
Individuals who open an account under the Senior Citizen Savings Scheme are eligible to receive quarterly disbursals against their deposited amount. Interest payment will be credited to an individual’s account on the first date of April, July, October, and January.
Mode of Deposit
An individual can choose to deposit their money in cash if the amount is below Rs. 1 Lakh, but has to pay in cheque if it exceeds Rs. 1 Lakh.
Nomination Facility
Individuals can register a nominee when they are opening their accounts under the Senior Citizen Savings Scheme or at a later date. In the event of an account holder’s death, before the account matures, the nominee will be eligible to receive the due amount.
Security of Capital
SCSS is a government-endorsed scheme, and hence, capital invested in it enjoys superlative security and guarantee.
Substantial Returns
SCSS has been historically known to provide its subscribers interest at rates that are at par with what is offered by other saving schemes such as fixed deposit, recurring deposit, etc.
Calculation of Interest under the Senior Citizen Savings Scheme
Interest is compounded quarterly and disbursed at every quarter on the first date of April, July, October, and January. The primary components used for its calculation are –
- The principal or deposit amount
- Interest rate
- Maturity period
The maturity period is fixed, while the other two components are variable. The interest rate under which an individual invested is considered for interest calculation. A demonstration of interest calculation and the maturity amount is provided below:
Mr Amit deposits Rs. 10 Lakh under SCSS on 1st April 2020. In that respective quarter of the Financial Year 2020 – 21, the interest rate offered was 7.4%. Hence, the total interest he is eligible to earn at maturity is Rs. (1000000 * 7.4% * 5).
How to Open an Account under the Senior Citizen Savings Scheme?
An SCSS account can be opened with a post office or any of the private or public banks in India. The procedure for both is similar, and is mentioned below –
Step 1: Visit your nearest bank branch or Post office branch
Step 2: Duly fill up the Form A
Step 3: Submit the original and photocopies of all the necessary documents, broadly address and identity proof
Step 4: Produce age proof
Post Office SCSS Form
The SCSS application form is available at any Post Office branch or on the Post Office’s official website. The procedure for completing the application form is as follows:
- Fill in the name of the Post Office branch in the top left corner of the form.
- If you already have a Post Office savings account, enter the account number.
- Enter the Post Office branch address in the ‘To’ field.
- Copy and paste the account holder’s photo.
- Now, fill in the first blank field with the account holder’s name and select the ‘SCSS’ option from the drop-down menu.
- You do not need to pick any of the choices in the ‘Additional Facilities Available’ section because they are only applicable if you are applying to open a savings account.
- Select the account holder type, such as self, minor with a guardian, or a person of unsound mind with guardian.
- Choose whether the account is single, either or survivor, or all or survivor.
- Proceed to field number 2, where you must enter the deposit amount in both figures and words. If you’re presenting a check, make a note of the check number and date.
- Enter the account holder’s personal information (s).
- At the bottom of the table, mark the cells where you have submitted the needed document proofs.
- Signatures of all account holders are required at the end of Page 1 and Page 2 of the form.
- Mention the nomination for the account, as well as the nominee’s contact information. To confirm this information, including the signatures of all account holders.
How to Open SCSS Account in a Bank Offline
Step 1: Go to the Bank branch closest to you or the Bank branch where you have a savings account.
Step 2: Request an application form and fill it out with your personal information.
Step 3: Submit the application form, along with any supporting documentation, to the bank’s officials, along with the deposit amount in cash or check.
Step 4: The Bank professionals will process your application and the payment received. The SCSS account will be created once the payment is processed.
Banks Offering the Senior Citizen Saving Scheme
- Union Bank of India SCSS
- ICICI Bank SCSS
- State Bank of India SCSS
- UCO Bank SCSS
- IDBI Bank SCSS
- Indian Bank SCSS
- Indian Overseas Bank SCSS
- Punjab National Bank SCSS
- Canara Bank SCSS
- Central Bank of India
- Bank of Maharashtra SCSS
- Bank of Baroda SCSS
- Bank of India SCSS
Eligibility under SCSS
The category of individuals who are eligible to open an account under the Senior Citizen Savings Account is mentioned below –
- Individuals of and above the age of 60 years.
- Individuals who are of 55 years of age but have retired early under a superannuation or Voluntary Retirement Scheme (VRS) rules.
- Retired defence personnel provided they have satisfied other terms and conditions.
Non-resident Indians or NRIs, persons of Indian Origin or PIOs, and any member of a HUF or Hindu Undivided Family do not qualify for opening an account for the scheme.
The Documents Required to Apply under SCSS
An individual needs to produce the following documents to open an account under SCSS –
- Aadhaar Card
- Voter ID card
- PAN card
- Passport
- Telephone bill
- Electricity bill
- Birth certificate/senior citizen card
- 2 passport-sized photographs
These documents need to be self-attested.
Tax Implications of Senior Citizen Savings Scheme
SCSS is one of the most beneficial investment options for senior citizens, given its security of capital, high returns, and also the tax benefit it attracts.
The principal amount deposited in an SCSS account is eligible for tax deductions under Section 80C of the Income Tax Act, 1961, up to the limit of Rs. 1.5 Lakh. However, this exemption is applicable only under the existing tax regime. It is not allowed if an individual chooses to file tax returns under the new system introduced in Union Budget 2021.
The interest received is, however, subject to taxation as per the applicable slab of the concerned taxpayer. Besides, if an individual’s interest income in a year exceeds Rs. 50,000, then it is subject to Tax Deducted at Source (TDS).
FAQs
Maturity Tenure
The maturity period for the SCSS scheme is 5 years. It can be extended for another 3 years, effectively bringing up the period to 8 years. If an individual is willing to extend such a period by 3 years, he/she shall submit Form B after duly filling it. An extension is allowed only once.
How do I access my SCSS account online? ›
You can open an SCSS account either at an authorised bank branch or at a post office branch. If the bank allows, you can open the SCSS account online on the bank's internet banking portal or mobile banking app. There is no option to open the SCSS account online with the post office.
What is the interest rate for SCSS senior citizen savings scheme? ›
High-Interest Rate: Offering interest at the rate of 8.2% per annum, SCSS is among the most beneficial investment options, especially compared to the rather traditional ways of savings such as FD and Savings Account. Tax Benefit- Under section 80C of the Income Tax Act, SCSS is eligible for a tax deduction of up to Rs.
What is the monthly income scheme for senior citizens? ›
There is already one scheme for senior citizens – the Pradhan Mantri Vaya Vandana Yojana (PMVVY). All these schemes, put together, will earn a senior citizen couple a monthly income of around Rs 70,500, on an investment of Rs 1.1 crore. These are assured returns.
Can I withdraw money from SCSS? ›
According to Senior Citizen Savings Scheme Rules 2019, multiple partial withdrawals from an SCSS account is not permitted. But an individual can prematurely withdraw from an account and close it, which entails a penalty. Note that SCSS deposit matures after five years from the date of account opening.
What happens if the depositor dies in SCSS? ›
(3) In case of death of a depositor before maturity, the account shall be closed and deposit refunded on an application in Form 'F' alongwith interest applicable to the scheme till the date of death on which the depositor expired, to the nominee or legal heir in case the nominee has also expired or nomination as ...
Which bank gives highest interest rate for senior citizens? ›
State Bank of India
The highest interest rate of 7.50% is offered on tenure of 2 years to less than 3 years. SBI has launched special 400 days deposit called Amrit Kalash, offering highest interest rate of 7.60% to senior citizens.
Which bank is best for SCSS? ›
| Scheme | Interest rate | Tenure |
|---|
| SBI WE care | 7.50% | 5-10 years |
| HDFC Bank Care FD | 7.75% | 5-10 years |
| IDBI Bank Namman FD | 7.50% | 1- 10 years |
| ICICI Bank Golden Years | 7.50% | 5-10 years |
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A post office senior citizen saving scheme makes a good investment option for people who have retired as it offers an interest rate of 8.0% w.e.f January 01, 2023. Below are the important features of post office senior citizen savings scheme: Post Office Senior Citizen Saving Scheme Maturity Period of SCSS: 5 years.
Can I invest every year in SCSS? ›
Flexible Duration-The The SCSS account comes with a time period of five years but it can be extended up to 3 more years. This way, the Senior Citizen Saving Scheme acts as a mid-term and a long-term investment tool as well.
Q. Can an SCSS account be extended? A. A depositor may extend the account for a further period of three years by making an application to the deposit office within a period of one year after maturity.
What are the rules for SCSS scheme? ›
Senior Citizens Savings Scheme Rules
- He/she must be of or above 60 years of age.
- He/she must be above the age of 55 years but less than 60 years who has retired under superannuation or applicable VRS rules.
- Ex defence personnel can also open an account, per SCSS scheme rules.
Best Senior Citizens Investment Plans with High Returns 2023
| Investment Option | Returns |
|---|
| Senior Citizens Savings Scheme (SCSS) | 8.00% p.a. |
| Pradhan Mantri Vaya Vandana Yojana (PMVVY) | 7.40% p.a. |
| Post Office Monthly Income Scheme (POMIS) | 7.10% p.a. |
| Senior Citizen FD | 3.5% – 8.95% p.a. |
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Government Benefits for Seniors Over 65
Social Security Disability Insurance (SSDI), a federal disability insurance program. Supplemental Security Income (SSI), a federal cash assistance program for low-income people who are age 65 or older, blind, or disabled.
What are the benefits available for senior citizen in India? ›
Senior citizen (Age 60 years or more but less than 80 years): A senior citizen is granted a higher exemption limit compared to non-senior citizens. The exemption limit under the old tax regime is Rs. 3,00,000 and in the new tax regime is Rs 2,50,000.
What happens to senior citizens when they run out of money? ›
Aging adults without money to support them through the rest of their lives can stay in a nursing home for up to 100 days—and Medicaid will cover the cost for this brief period. Seniors who reside in an assisted living facility and run out of funds will be evicted.
How do I deposit money into my SCSS account? ›
Deposit amounts less than Rs.1 lakh can be paid by cash, while amounts more than Rs.1 lakh must be paid by cheque. In the case of cheque payments, the date the cheque realises will be the opening date of the account. Transfer of an account: An SCSS account can be transferred from a bank to a post office and vice versa.
What is the difference between FD and SCSS? ›
Interest from SCSS can be drawn every quarter, whereas FDs only gives you the interest income along with principal at the maturity of the deposit tenure. The choice between bank FD and SCSS would ultimately depend on your liquidity needs and the amount that you plan to invest.
Is SCSS available in SBI? ›
At present it is 8.00% per annum with effect from 01.01.2023. If the interest payable every quarter is not claimed by an account holder, such interest shall not earn additional interest. The whole amount of deposit in a joint account shall be attributable to the first account holder only.
What are the rules for SCSS in SBI? ›
Features of the SBI Senior Citizen Savings Scheme
The minimum deposit amount for this scheme is Rs. 1000, and the deposit cannot exceed Rs. 15 lakh. After the maturity period of 5 years, the account may be extended for a period of another 3 years.
The Process
If no survivor or nominee is added to the account, all the legal heirs of the deceased shall jointly submit a legal representation supported by a legal heir-ship certificate, family membership, relationship certificate, etc.
Which Bank gives 8% interest? ›
DCB Bank FD rates are in the range of 3.75-8.00% p.a. to the general public and 4.25-8.50% p.a. to senior citizens on tenures ranging from 7 days to 10 years. The interest rate on DCB Bank Tax Saving FDs is 7.60% p.a. for the general public and 8.10% p.a. for senior citizen depositors for tenures of 5 years.
What is the senior citizen interest rate in USA? ›
The rate of interest offered is 6.25% and has been applicable since 13 November 2020. Senior citizens receive an additional 50 bps on the interest rate for regular citizens.
What is the highest FD interest rate for senior citizens in 2023? ›
ICICI Bank senior citizen FD rates
ICICI Bank offers interest rate between 3.50% to 7.50% to senior citizens on tenures ranging from 7 days to 10 years. The interest rates are effective from February 24, 2023.
Is interest compounded in SCSS? ›
SCSS interest rate is compounded quarterly and distributed every quarter on the first day of April, July, October, and January. Currently, SCSS interest rate is 8.0%, and this interest rate is applicable from FY 21–22 onwards.
What is the highest rate of interest for senior citizens in SBI? ›
SBI offers FD interest rates of 3.00%-7.00% p.a. to the general public and 3.50%-7.50% p.a. to senior citizens for tenures ranging from 7 days to 10 years. The interest rate of SBI Tax Saving FD is 6.50% p.a. for the general public and 7.50% p.a. for senior citizen depositors.
Can I double my money in 5 years? ›
As a rate of return, long-term mutual funds can offer rates between 12% and 15% per year. With these mutual funds, it may take between 5 and 6 years to double your money.
Who has the best plan for senior citizens? ›
Medicare is the best health insurance option for seniors and retirees. For those age 65 and older or who have a qualifying disability, the Medicare program will be the cheapest health insurance with the best benefits.
What is the best way for a senior citizen? ›
For Seniors: A Checklist for Good Health
- Don't forget your well visits and recommended screenings. ...
- Exercise and stay active. ...
- Maintain strong bones. ...
- Don't let joint pain slow you down. ...
- Eat a heart healthy diet. ...
- Take care of your eyes. ...
- Make sure your hearing is loud and clear. ...
- Keep a skip in your step.
Despite being an excellent instrument to guarantee returns post-retirement, there are Senior Citizen Savings Scheme has its own shortcomings:
- Lower rate of return compared to many market-linked instruments.
- Penalty on premature withdrawal in case of emergency.
- You cannot open this account online.
Once you have extended your account for a period of three years, you cannot extend it again. There are no automatic extensions, so if you don't close the account on maturity or request for an extension within one year, the account shall be considered as matured.
What is the age limit for senior citizen bank account? ›
Senior or Super Senior Citizen may deposit jointly with other persons below the age of 60 or 80 respectively, with benefit of additional rate of interest. In such cases the name of the senior/super senior citizen is to be given as the first name in the application.
What is the best investment for a 60 year old? ›
Some good investments for retirement are defined contribution plans, such as 401(k)s and 403(b)s, traditional IRAs and Roth IRAs, cash-value life insurance plans, and guaranteed income annuities.
What is the best investment for a 70 year old? ›
The average 70-year-old would most likely benefit from investing in Treasury securities, dividend-paying stocks, and annuities. All of these options offer relatively low risk.
What is the income tax exemption for senior citizens in India? ›
For ordinary individual tax payers, the basic exemption limit, upto which he is not required to pay any tax, is presently fixed at Rs. 2.50 lakh for AY 2021–22. However, for Senior Citizens the basic exemption limit is fixed at a higher figure of Rs. 3 lakh.
What is the $900 grocery stimulus for seniors? ›
What is the $900 grocery stimulus for seniors? In short, there isn't one — yet. While there was some chatter about a possible $900 grocery stimulus for seniors 60 and over, there was zero federal funding passed for 2022 or 2023 for stimulus payments of any kind on a national scale.
Is there a Social Security bonus for seniors? ›
That's a myth: 62 is the earliest age you can claim your benefit, but it's not the only age to do so. Waiting to claim Social Security after age 62 comes with a bonus: roughly 8% additional monthly income per year for each year you delay claiming (up to age 70).
Do senior citizens get money from government in USA? ›
Supplemental Security Income (SSI)
SSI is a federal government program that provides a monthly cash benefit for the elderly (age 65 and over), blind, or disabled of any age who have extremely low income and very few resources.
How much can a 70 year old earn without paying taxes? ›
For retirees 65 and older, here's when you can stop filing taxes: Single retirees who earn less than $14,250. Married retirees filing jointly, who earn less than $26,450 if one spouse is 65 or older or who earn less than $27,800 if both spouses are age 65 or older.
How much is senior citizen pension in India? ›
For Financial Year 2021-22, the Scheme shall provide an assured pension of 7.40% p.a. payable monthly. This assured rate of pension shall be payable for the full policy term of 10 years for all the policies purchased till 31st March, 2022.
The varistha mediclaim policy by government is available to all Indian citizens aged 60 to 80 years. One lakh & 2 lakh are the two sum insured options available under this policy. The insurance coverage applies to hospitalization expenses and treatment for critical illness costs and treatment costs.
What happens when SCSS matures? ›
The amount of excess interest paid (at higher rate applicable to the deposits under SCSS) after maturity shall be deducted.
Can SCSS senior citizen saving scheme be extended? ›
Once you have extended your account for a period of three years, you cannot extend it again. There are no automatic extensions, so if you don't close the account on maturity or request for an extension within one year, the account shall be considered as matured.
How do I close my SCSS account after maturity? ›
Although the SCSS has a five-year tenure, it can be closed prematurely by submitting an application in Form-2. The following penalties are applicable: If you withdraw within one year, you will not receive any interest, and any interest already paid will be deducted from the principal amount.
Is the term for the senior citizens saving scheme SCSS is 10 years? ›
SCSS Features
Maturity of the scheme: The maturity period of the scheme is 5 years. However, individuals can extend the maturity duration for 3 years by submitting an application in the required format within one year of maturity of the account.
What are the disadvantages of senior citizen scheme? ›
Disadvantages of Senior Citizen Savings Scheme
- Although SCSS returns could be higher than prevailing FD rates, the returns could still be lower than market-linked investments like equities and even NPS, although at much higher levels of risks.
- SCSS returns are fully taxable as per the investor's tax slab rate.
Banks including the State Bank of India (SBI), ICICI Bank, and HDFC Bank offer special fixed deposits to senior citizens with a higher interest rate for a specific tenure. The Reserve Bank of India (RBI) has been raising the repo rate since May 2022, which has led to banks raising their deposit interest rates.
What is the interest rate in post office for senior citizens? ›
Post Office Interest Rates for Senior Citizens
The central government authorizes the interest rate on the post office senior citizen scheme. Currently, it is 8.0% per annum (from January 01 to March 31, 2023).
What is the interest rate for senior citizens in SBI? ›
SBI offers FD interest rates of 3.00%-7.00% p.a. to the general public and 3.50%-7.50% p.a. to senior citizens for tenures ranging from 7 days to 10 years. The interest rate of SBI Tax Saving FD is 6.50% p.a. for the general public and 7.50% p.a. for senior citizen depositors.
What is the tenure of SCSS in SBI? ›
Comparison Between Senior Citizen Saving Scheme and Fixed Deposit
| Particulars | SBI WeCare | SCSS |
|---|
| Tenure | Minimum – 5 years Maximum – 10 years | Maturity period – 5 years (which may be further extended by 3 years) |
| Tax benefit | Not applicable | Benefit under section 80C of Income Tax Act, 1961 |
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