SCSS: How To Open Account, Eligibility, Benefits And Everything You Need To Know

Senior Citizen Savings Scheme (SCSS) is a government-supported retirement benefit scheme for the elderly in India. The senior citizens may invest a lump sum individually or jointly and get access to regular income along with tax benefits. In the Scheme, investors can open an SCSS account to get benefits in any post office branch or authorized bank.

It offers guaranteed returns upon maturity. Those opening an account receive an interest payment on the deposited principal amount at a fixed rate. Interest payments are made quarterly from the date of deposit to 31st March/31st June/30th September/31st December. The interest is credited to the account on the first date of April, July, October, and January.

Eligibility

Individuals over 60 years old, retired civilian employees above 55 and below 60 years old, and retired defense employees above 50 and below 60 years old can open an SCSS account with a post office or bank. The account can be opened individually or jointly with a spouse, with the first account holder credited. Non-Resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not eligible to open a SCSS.

Premature Closure

Individuals can withdraw and close an account with Form-2, but must meet certain conditions. If the account is closed before one year, interest will be recovered from the principal amount. If it's closed after one year but before two years, a 1.5% penalty will be imposed. If it's closed after two years, 1% of the principal amount will be deducted and a penalty will be imposed. Multiple withdrawals are not allowed.  

How Does It Work?

An SCSS account is established by depositing a minimum amount of Rs. 1,000 to Rs. 30 lakh in a single instalment, restricted to the retirement benefits received. The deposit must be made within a month of receiving the retirement benefits from the employer. The account covers any payments due to the account holder on account of retirement, including provident fund dues, retirement gratuity, commuted pension value, leave encashment, Group Savings Linked Insurance Scheme, Employees' Family Pension Scheme, and ex-gratia payments. If the deposit exceeds the ceiling amount, the excess amount is refunded to the account holder. Interest on the deposit is paid quarterly and can be drawn through auto credit or ECS. The account can be closed prematurely after opening and can be extended for up to three years from maturity.  

How To Open A SCSS Account In Bank?

The following are the steps to open a SCSS account with an approved bank:

Step 1: Go to the nearest authorized bank branch and obtain the SCSS application form

Step 2: Fill in the necessary information on the application form

Step 3: Attach the required documents

Step 4: Submit the application form, documents and the deposit money with the bank staff

Step 5: The bank employees will process the application and open the SCSS account.