The Senior Citizen Savings Scheme (SCSS) is a government-backed initiative designed for individuals aged 60 years and above. This scheme offers attractive interest rates, paid quarterly, providing a steady and reliable income source. SCSS ensures secure savings with minimal risk, making it an ideal option for senior citizens seeking financial stability in their golden years.
Here are the key highlights of this savings scheme for senior citizens:
Features |
Details |
Rate of Interest |
8.20% p.a. (F.Y 2022-2023) |
Tenor |
5 years (with a choice to extend it further for 3 more years) |
Minimum investment amount |
₹1,000 |
Maximum investment amount |
₹30 Lakhs |
Benefits |
|
Penalty for Premature Withdrawal |
|
The SCSS interest rate currently stands at 8.20% p.a. with effect from 01.04.2023. Compared to savings and fixed deposit accounts, the Senior Citizen Savings Scheme comes with similar or better returns. The interest rate is reviewed and paid out quarterly.
Please note that the rate of interest is fixed at the time of investment and remains constant during the entire tenure of 5 years.
The following is a list of banks that offer the Senior Citizen Savings Scheme:
State Bank of Hyderabad
Syndicate Bank
United Bank of India
UCO Bank
Punjab National Bank
Indian Overseas Bank
State Bank of Bikaner & Jaipur
State Bank of Mysore
Oriental Bank of Commerce
State Bank of India
Canara Bank
Bank of India
State Bank of Patiala
IDBI Bank Ltd.
Corporation Bank
State Bank of Travancore
Allahabad Bank
Vijaya Bank
Central Bank of India
Dena Bank
Bank of Baroda
Indian Bank
Bank of Maharashtra
ICICI Bank Ltd.
Union Bank of India
Andhra Bank
Please note that the SCSS interest rate i.e. 8.20% p.a. remains the same across all the banks mentioned above.
This scheme is not available on Bajaj Markets. However, you can open a Senior Citizens Savings Account in two ways:
Request the authorities at the Post Office to allow you access to e-banking and mobile banking
Visit the official e-banking website once you have unlocked e-banking facilities
Enter the code sent to you 48 hours after placing your request
Search for the ‘New User Activation’ option on the page and complete your registration process
There, you may initiate the process of opening your Senior Citizens Savings Account.
Visit the post office nearest to you
Take all necessary documents with you
Request for the opening of a Senior Citizens Savings Account
Fill out the form given
Submit the duly filled form and attach your documents with it
The category of individuals listed below are qualified for the Senior Citizen Savings Scheme:
Individuals who are 60 years old or above
Individuals between 55 and 60 years who have retired early due to superannuation or Voluntary Retirement Scheme (VRS) regulations
Retired members of the armed forces, provided they have met all other requirements
While your PAN card is mandatory for opening an SCSS account, here is the list of other documents required to open an SCSS account.
Proof of identity and address:
Aadhaar Card
Passport
Driving licence
Voter ID card
NREGA job card attested by State Government officer
In case you are under 60 years of age:
An employer’s certificate mentioning details of retirement on superannuation or otherwise. It should also include the details of retirement benefits and employment period
The proof of date will also be required to show the disbursal of retirement benefits
Investments made in SCSS are eligible for tax deductions. Here is how:
Under the Income Tax Act of 1961 Section 80C, the principal amount deposited in the SCSS is entitled to a tax deduction of up to ₹1.5 Lakhs each year.
The tax rate applicable to the individual is based on the interest earned. If the total amount of interest earned for a fiscal year exceeds ₹50,000, Tax Deducted at Source (or TDS) is applicable to the earned interest.
Here are the different conditions of premature withdrawals:
If the account is closed within one year, no interest will be paid. Also, any interest that has been paid will be deducted from the account's principal amount.
If the account is closed within two years, 1.5% of your deposit will be charged as a penalty.
If the account is closed between 2 to 5 years, 1% of the deposit amount will be charged as a penalty.
Please note that there are no penalties applicable if an extended account is cancelled more than a year following the account's extension.
In case of the demise of an SCSS account holder, the account will be closed and the entire maturity proceeds will be given to the designated legal heir or beneficiary.
To expedite the account's closure for deceased claims, the legal heir or the nominee must submit a written application in the required format together with a copy of the death certificate.
The maximum amount you can deposit under the SCSS scheme is ₹30 Lakhs.
There is no online application option for the SCSS scheme. The customer must complete the necessary paperwork in person at a post office or bank branch to start an SCSS account. The form, along with proof of KYC, age, identity, and address, as well as a cheque for the deposit amount, must be submitted.
Currently, SCSS offers an interest rate of 8.20% p.a.
Yes, you may extend your SCSS account for an additional three years within a year of maturity.
An account may be moved from one deposit office to another by using Form G.
A senior citizen can potentially hold multiple SCSS accounts, but there are some key limitations to consider:
Maximum Deposit Limit: The total deposit across all SCSS accounts for a single individual cannot exceed ₹30 Lakhs
Single Branch Restriction: You cannot open more than one SCSS account in the same deposit branch within a calendar month
Account Type: Joint accounts with a spouse are permitted under SCSS, but the combined deposit still adheres to the ₹30 Lakh limit
In essence, while you can technically open multiple accounts, the total deposit across all of them must be under ₹30 Lakhs. In some cases, the maximum deposit limit might be lower depending on the amount received as retirement benefits.
Yes, the joint account facility is available under the Senior Citizen Savings Scheme (SCSS). However, there are a few things to keep in mind:
Account Holder Eligibility: Only a spouse can be a joint account holder in an SCSS account
Deposit Limit Applies: The total deposit amount (across both individuals) still needs to be within the overall limit of ₹30 Lakhs
Benefits Go to First Depositor: The entire investment amount and interest earned are attributed to the first account holder (the one who deposits initially)
Overall, while a spouse can be a joint account holder for convenience, the financial benefits are primarily directed towards the first depositor who meets the eligibility criteria (being a senior citizen above 60 years old).