Summary of this article
Government-supported savings scheme offering fixed quarterly interest to investors.
Available to individuals aged 60 and above, with Rs 30 lakh limit.
Five-year deposit tenure, extendable by three years, with tax benefits.
The Senior Citizens Savings Scheme (SCSS) is a government-backed investment option, especially for senior citizens (aged above 60 years). It is offered through post offices and authorised banks. It provides fixed returns, and the deposit rate is reviewed periodically by the government.
Eligibility
An account under SCSS can be opened individually or jointly with a spouse. The scheme is available to Indian individuals aged 60 years or above on the date of opening the account. Individuals aged between 55 and 60 years who have retired under a voluntary retirement scheme must open the account within one month of receiving their retirement benefits. The scheme is not open to non-resident Indians (NRIs), persons of Indian origin (PIOs), or Hindu undivided families (HUFs).
Deposit Limits and Interest Details
The minimum deposit under SCSS is Rs 1,000, with subsequent deposits allowed in multiples of Rs 1,000. The maximum investment limit is Rs 30 lakh across one SCSS account held individually or jointly.
Both spouses can also open individual as well as joint accounts with each other, with a maximum deposit of up to Rs 30 lakh in each account, provided both are independently eligible to invest in the scheme. It is important to note that the primary accountholder must be a senior citizen or be qualified to open an SCSS account (for voluntary retirement accountholders).
SCSS currently offers an interest rate of 8.20 per cent per annum, payable every quarter. Interest is calculated from the date of deposit and credited to the depositor’s linked savings account at the start of the next quarter.
Key Features of SCSS
The scheme is backed by the Government of India that ensures safety and guaranteed returns to seniors.
Interest is paid quarterly that gives senior citizens a regular source of income.
The account has a tenure of five years that can be extended by an additional three years upon maturity.
Investors can open a joint account with their spouse under the scheme.
Deposits made under the scheme qualify for tax benefits under Section 80C of the Income-tax Act, 1961.
Withdrawal Rules and Account Closure
On completion of five years, accountholders can withdraw the entire balance. Investors can also close their account before maturity, subject to certain deductions. If the account is closed within one year, no interest is payable to the accountholder, and any interest already credited will be recovered. And if closure is made after one year, but before two years, 1.50 per cent of the deposit amount is deducted, while for closures after two years, the deduction is 1 per cent.
