Post Office Senior Citizen Scheme: Features, Benefits and More

The post office Senior Citizen Saving Scheme (SCSS) is a policy that offers retirees an opportunity for investment at reasonable interest rates and can be opened at any post office across India. Senior citizens can invest a lump sum in the plan to get regular quarterly returns with tax benefits. The scheme is an ideal investment choice for those over 60 years of age as it offers a steady stream of long-term income, unmatched security, and attractive features. This blog dives deep into the post office Senior Citizen Saving Scheme, its features, benefits, and application process.

What is the Post Office Senior Citizen Savings Scheme?

A Senior Citizens Savings Scheme (SCSS) is a fixed deposit retirement benefit program backed by the government of India. Senior citizens older than 60 years can put a lump sum into this scheme, individually or jointly and gain access to regular income and tax benefits. 

Senior citizens can open an SCSS account in any post office across India. You can visit the nearest post office branch where you have a savings account and open an SCSS account. You must check the features, eligibility criteria, and interest rates before applying for the SCSS offered by the post office.

Key Features of Post Office Senior Citizen Scheme

The salient features of the SCSS are:

• Maturity Period

The SCSS account maturity period is five years from the opening date. To close an account, you must submit an application form along with your passbook to the concerned post office. In the event of the account holder’s demise, the account can still earn interest at the rate offered by the post office savings account from the date of passing. Your spouse can continue to hold the account till maturity if they are eligible to open an SCSS account.

• Deposit Limit

The minimum deposit required in the SCSS account is Rs. 1000. After that, the amount must be in multiples of Rs. 1000 with the maximum limit of Rs. 15 lakhs. You may open several SCSS accounts at once, but their total balance cannot be more than Rs. 15 lakhs. Suppose any excess amount is deposited in the SCSS account, In that case, it will be immediately refunded to the depositor, and only the interest from the deposit date to the refund date is applicable. 

• Premature Closure

The scheme can be terminated prematurely. However, specific rules are in place  for premature SCSS post office account closure. For example, if the account is closed within a year, the investor will not gain any interest, and if the claim is already paid, it can be recovered from the amount.

If the account is closed between 1 and 2 years, 1.5% of the deposit amount will be deducted. If the account is closed between 2 and 5 years, 1% of the deposit amount will be deducted. You can extend your SCSS account for three years if you fill out an application form within one year of maturity. In this case, the account can be terminated anytime without deduction after one year from the date of account extension.

• Tax Benefits

The depositor to the post office senior citizen scheme is eligible to claim tax benefits under Section 80 C of the Income Tax Act of India for the amount deposited. 

• Multiple Accounts

Individuals enrolling for the post office SCSS can open and operate one or more accounts, either in their name or as a joint account with their spouse. But the spouse needs to be present to open the joint account, and the investor in the account is the initial depositor.

• Nomination Facility

The scheme allows the investor to fill in a nomination when opening the account. The depositor can nominate any individual after filling out an application. 

• Transfer

A post office SCSS account can be transferred to a bank, from a bank to the post office or from one post office to another quickly and hassle-free. 

How to Open an Account?

You can open a post office senior citizen savings account at your nearest post office by following the steps below:

• Collect the post office senior citizens savings scheme application form at any branch or download it from the authorised post office website.
• Fill out the application form by accurately giving all the details, including nominee details.
• Submit essential documents showing proof of identity, address and age (such as an Aadhar card) with two recent passport photographs. 
• PAN card 
• Submit a duly filled KYC form.
• Submit employer certificate with retirement benefits information  
• Obtain the signature of a witness to complete the post office SCSS application

To automate the scheme, you will need to have a savings bank account and submit a request for automatic transfer of SCSS account interest to the RD account via the depositor’s post office savings account.

Steps to Fill the Post Office Senior Citizens Savings Application

1. Enter the branch name of the post office on the top left of the form.
2. Enter your account number if you already have a post office savings account.
3. Enter the post office branch address under the “To” section.
4. Paste the photograph of the applicant.
5. Write the applicant’s name in the blank space and check the SCSS option. 
6. Next, choose the account holder type-whether self or minor with guardian and so on.
7. Then, choose the account type – whether single or survivor.
8. Then, move on to the following field to enter the deposit amount in words and figures. If you are paying by cheque, write the cheque number and date.
9. Next, enter the personal details of the applicant.
10. Now, tick the cells for all supporting documents you have provided with the form. 
11. Finally, the account holders must sign at the end of the form.
12. Also, add the nominee’s name and details that you have chosen, along with the signatures of the applicant.

Interest Rates

The current interest rate for post office SCSS is 7.6% per annum. The post office interest for senior citizens saving scheme is payable every quarter, i.e., on March 31^st, Sept 30^th, and December 31^st on the first instance. The interest income is taxable if the total amount in all post office SCSS accounts exceeds Rs.50,000 in a given year. 

Eligibility Criteria

Individuals over 60 years of age become eligible to invest in the post office SCSS. Civilian employees with voluntary retirement or superannuation above 55 and below 60 years of age can also invest in this scheme. In addition, Retired Defense Employees above 50 years of age and below 60 years of age are eligible to invest in this scheme. Both the exception cases are subject to the condition that investment to be made within 1 month of receipt of retirement benefits.

The SCSS account can be opened either individually or jointly with your spouse. The entire deposit amount of the joint account will be surrendered to the first account holder’s name. 

Benefits of Post Office Senior Citizen Scheme 

There are several benefits of opening a post office senior citizen scheme:

Tax Benefit

You can claim an income tax deduction of up to Rs.1.5 lakhs under Section 80C for the amount deposited under this scheme.

High Interest

Post office SCSS is one of the best investment options for senior citizens compared to FD or savings accounts, as it offers a 7.6% interest rate. p.a. 

Simple Process

Opening a post office SCSS account is simple and quick, and you can begin an SCSS account in any post office in India.

Quarterly Payout

The interest amount is paid quarterly for SCSS investors, ensuring periodic payments to the individual. 

Safety

Since the savings scheme is government-backed, it is one of the most reliable and safe investment options with assured returns.

Flexibility

An SCSS in a post office is flexible as the account tenure of 5 years can be extended for another three years.

Conclusion

The post office senior citizen scheme is the ideal investment option for senior citizens of India due to its government backing, security, reliability, ease of application and high returns.

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