Senior Citizen Savings Scheme (SCSS)

The Senior Citizen Savings Scheme (SCSS) is an offering by the government to secure senior citizens who require a steady income post-retirement. It was introduced in 2004. All citizens above the age of 60 can open an individual or joint account with their spouse. The maximum deposit permitted in an SCSS account is Rs. 30 lakhs for a period of 5 years. The interest rate may be revised every quarter. It is currently set at 8.2% per annum (Q1 of FY 2025-2026).

What is the SCSS Scheme?

The SCSS, or the Senior Citizens Savings Scheme, is a government-backed savings instrument for retired individuals. Through the scheme, senior citizens residing in India can invest a sum of money individually or jointly and get regular income and tax benefits.

Since this scheme is a Post Office savings scheme, senior citizens do not need a bank account. They can open a savings account at their post office, deposit funds, and earn returns from the scheme at attractive interest rates.

Features of Senior Citizen Savings Scheme

How does SCSS Work?

The working of an SCSS account is explained below:

• An SCSS account can be opened by depositing a minimum amount of Rs. 1,000 or a maximum amount of Rs. 30 lakhs in a single installment.
• The deposit amount is capped at the benefits you can receive upon retirement.
• You must deposit the amount within one month of receiving the retirement benefits.
• The benefits include gratuity, leave encashment, provident fund dues, commuted value of pension, savings element of Group Savings Linked Insurance Scheme, retirement-cum-withdrawal benefit under the Employees’ Family Pension Scheme, and ex-gratia payments under a special voluntary or a voluntary retirement scheme.
• If the deposit is more than the ceiling amount, the additional amount will be refunded to the account holder immediately.
• The account holder will receive interest on the deposit once every quarter.
• You can withdraw the interest through Electronic Clearing Service (ECS) or opt for an auto credit into the savings account held at the same post office branch.
• You can prematurely close an SCSS account at any time after the date of opening.
• The account matures in 5 years, but you can extend it for a period of 3 more years from the date of maturity.
• You must apply for the extension within 1 year of the date of maturity.

The SCSS account opening application form is available on India Post. You can collect a physical copy from the nearest branch of the post office or download it online from the India Post website.

Senior Citizen Savings Scheme Interest Rate

The senior citizen savings scheme features an attractive interest rate of 8.2% per annum in Q1 (April-June) of financial year 2025-26, which makes it a high-yielding fixed income savings scheme for senior citizens.

However, the SCSS interest rates are reviewed quarterly and may change periodically.

Interest calculation on senior citizen savings scheme

Suppose you deposit Rs. 5,00,000 in a senior citizen savings scheme. The current interest rate is 8.2% per annum.

The formula to calculate earnings per quarter is

[Initial investment x interest rate] / 4

So, in the above example,

Earnings per quarter = 5,00,000 x 8.2% / 4 = Rs. 10,250

If you invest for a tenure of 5 years, you will earn a total interest of Rs. 2,05,000 (10,250 x 20).

The total amount you will receive upon maturity is Rs. 7,05,000.

Documents required to open an SCSS account

You will need the following documents to open an SCSS account:

• Two recent passport-sized photographs
• Proof of identity - A copy of your Voter’s ID, Aadhaar Card, PAN Card, passport, etc.
• Proof of address - A copy of your ration card, utility bills, Aadhaar Card, etc.
• Proof of age - A copy of your PAN Card, birth certificate, Voter’s ID, etc.

Which Banks Offer SCSS?

An SCSS is offered by the following banks:

Historical Trends in SCSS Interest Rates

The following table highlights the periods in a financial year when the SCSS interest rate changed.

Benefits of the SCSS Scheme

• Ease of opening and maintaining the account

You can open an SCSS account by visiting the bank or post office. Some banks also allow you to open an account online on their website.

• Low-risk investment

SCSS is a government-backed scheme, where returns aren’t market-linked. As a result, it is a safer option than other post-retirement investment vehicles.

• Higher interest rates

The SCSS interest rate is much higher than traditional savings instruments like senior citizens’ savings accounts, recurring deposits, or fixed deposits.

• Nomination facility

You can register a nominee when opening the account or later, as per your preference. The nominee receives the funds in case the account holder passes away before the account matures.

• Income tax deductions

SCSS allows senior citizens to claim deductions of up to Rs. 1.5 lakh on the principal amount deposited under Section 80C of the Income Tax Act 1961.

• Regular payouts

SCSS can provide senior citizens with a regular income post-retirement. You can withdraw the interest earned quarterly.  

Conclusion

Now that you know about the benefits of the senior citizens savings scheme, the interest rates associated with it, and the features of the account, you can decide if you want to opt for this investment avenue post-retirement.

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