What is SCSS – Senior Citizen Saving Scheme

In the retirement phase, most people desire a stable income with minimal risk to the principal amount since they do not have any active earnings and depend on their earned corpus.

To address the financial needs of senior citizens in the country, the Government of India launched a saving scheme for senior citizens known as SCSS (Senior Citizen Saving Scheme). The plan is designed exclusively for seniors above 60 or who have attained the age of 55 or more but less than 60 and had retired under superannuation.The Senior Citizen Saving Scheme offers attractive interest rates with fixed returns. It allows you to efficiently safeguard your financial future and those of your near and dear ones.

You can open the account individually or jointly with your spouse, and deposit for five years. The best part is that the service is offered by various post-office and empanelled banks across the country.

Being government-backed, the Senior Citizen Scheme carries high credibility with low risk and offers guaranteed returns. This article will highlight the Senior Citizen Saving scheme, helping you understand how to invest in it, the eligibility criteria, its prime features, and more.

The Process to Open an SCSS Account

You can open a Senior Citizen Scheme account at any post office or select bank branches. The account opening process is also simple and hassle-free.

• Visit a post office or authorised bank where you have a savings account.
• Request a Senior Citizen Saving Scheme form and fill in the relevant details. Alternatively, you may download the form from the India post or bank website where you wish to open the account.
• Attach the required documents while submitting the form, with the deposit amount in cheque or cash.
• Your application will be processed by the bank or post office personnel.
• Once the payment is processed, your Senior Citizen Saving Scheme (SCSS) account will be created.

Documents Required to Open SCSS Account

The following documents are required to open an SCSS account:

• Form A: SCSS account opening form is available at any post office or designated bank; you can also download it online.
• Two passport-sized photographs.
• Documents verifying your age.
• Identity proof documents. (PAN Card, Ration Card, Aadhar Card)
• Address proof documents (passport, Voter ID, phone bill, etc.).
• In the case of retirees, a certificate from the employer stating

• The retirement was on superannuation or otherwise
• Retirement benefits
• Employment held (designation) 
• The period of employment.

How to Fill the Senior Citizen Saving Scheme Form- Post Office

To open an account with a post office, you can download the Senior Citizen Saving Scheme form online and submit the filled-out copy at the post office. Alternatively, you can request the post office for the SCSS form. On the form, you need to provide:

• Post Office branch name & address.
• Your Post office account number in case you hold an account.
• You need to select the SCSS scheme from the list of other schemes.
• Select the account type.
• Select mode of holding as Single/Joint/Either or Survivor.
• Fill in your name and personal details.
• Mention the deposit amount clearly in words & figures.
• Tick the documents to be submitted from the list of documents.
• Add nominee details and contact information.
• Secure the sign of all holders in the form.
• After filling in all details, you have to attach your KYC document copies and furnish a cheque or cash to open the account.

SCSS Eligibility

The eligibility criteria for opening a Senior Citizen Deposit Scheme account is as follows: 

• Only resident Indian individuals are eligible to invest in this saving scheme for senior citizens.
• Non-Resident Indians (NRIs), Hindu Undivided Families (HUFs) or Trusts cannot open the account.
• Individuals above the age of 60 can invest in the scheme.
• Individuals in the age bracket of 55-60 can invest in the plan if they have taken a voluntary retirement under VRS (Voluntary Retirement Scheme) or superannuation clause. 

• In such a case, the SCSS account should be opened within a month of receiving retirement benefits.
• If you have taken a voluntary retirement before age 60, you must provide documentary proof for the funds received under the VRS scheme.
• Retired defence personnel who have attained the age of 50 years can open the account.

Senior Citizen Deposit Scheme Features  

The key features of the Senior Citizen Scheme are:

• The minimum amount of investment in SCSS is Rs. 1000. The maximum investment amount is Rs 15,00,000 or the amount received as retirement benefit, whichever is lower.
• The SCSS is a one-time lump sum investment scheme; regular or recurring investments are not allowed.
• You can open an account jointly with your spouse also.
• If you have multiple accounts, the total investment in all accounts must not exceed Rs 15,00,000.
• You can deposit the investment amount to the bank or post office in a cheque for more than Rs 1,00,000. Investments of less than Rs 1,00,000 can be made in cash or cheque.
• The tenure of the SCSS is fixed at five years. However, you can extend it by another three years. This extension can be done only once, and the interest rate for this extended tenure would be at the prevailing rate. 
• Premature withdrawals are permitted after one year of account opening.

• If you close the account before completing two years in the scheme, a penalty of 1.5% of the deposit amount will be deducted.
• After two years, a 1% charge for foreclosure is charged from the deposit amount.

• If your deposit is in the extension period, you can close the account after one year of extension without any penalty.
• Interest accrued from SCSS is added to your interest income for tax calculation and taxed as per the tax slabs applicable.
• In the event of the death of the investor (before account maturity), the nominee or the legal heir will receive all the proceeds. 

Benefits of Senior Citizen Deposit Scheme

• SCSS offers attractive interest rates compared to fixed deposits or other traditional investments. 
• The returns are secure and guaranteed due to government backing.
• The investment in SCSS is tax deductible under Section 80C, up to a limit of Rs 1,50,000 in the financial year.
• The scheme offers the flexibility of premature withdrawal or closure of accounts.
• The nomination and joint holding facility ensures that money is easily accessible to family members after your demise.
• Ease of account opening and transfer to any designated bank or post office.

Senior Citizen Scheme Interest Rate

• The government declares the interest rate payable under SCSS quarterly. It is subject to revision from time to time, depending on several factors such as the prevalent rates in the market, inflation level, etc.
• The current interest rate is 7.4% per annum.
• Interest remains fixed for the tenure of the scheme until maturity. Even if the rates are revised in the interim, it applies only to new subscriptions. Existing deposits continue to enjoy the prevailing rate during account creation.
• The interest is disbursed every quarter in your savings account.

List of Banks that Offer SCSS

Currently, the following banks are designated to open an SCSS account:

• State Bank Of India.
• ICICI Bank.
• IDBI Bank.
• Indian Bank.
• Indian Overseas Bank.
• Canara Bank.
• Punjab National Bank.
• Bank Of Maharashtra.
• Bank Of Baroda.
• UCO Bank.
• Union Bank Of India.
• Central Bank Of India.

Final Thoughts

SCSS is an excellent investment option for senior citizens looking for good interest income, the safety of principal, and liquidity. Moreover, quarterly interest payments ensure a regular income for retirees. Hence, if you or a senior member of your family are searching for ways to create a stable income post-retirement, the Senior Citizens Savings Scheme is a wise choice. 

FAQs

1) Can I invest Rs 30 lakhs in SCSS?

The maximum limit for investment in SCSS is Rs 15 lakhs or retirement benefits (whichever is lower) per individual. If the deposit amount is in excess to the ceiling specified, a refund of the excess deposit will be made to the account holder.

2) What are considered as retirement benefits in SCSS?

In SCSS, “retirement benefits” means any payment due to the account holder on account of retirement on superannuation or otherwise. It includes Provident Fund dues, retirement or superannuation gratuity, commuted value of pension, cash equivalent of leave, savings element of Group Savings Linked Insurance Scheme payable by the employer on retirement, retirement-cum-withdrawal benefit under the Employees’ Family Pension Scheme and ex-gratia payments under a voluntary or a special voluntary retirement scheme.

3) Can I deposit multiple times in SCSS?

Once you open a Senior Citizen Deposit Scheme account, you cannot make another deposit in the same account. However, you can open another deposit account as long as the total investment amount is Rs 15 lakhs in all the accounts. 

4) Is interest in SCSS fixed for five years?

Once the SCSS deposit is created, the interest rate applicable remains constant, even if you decide to extend the account tenure by 3 years post-maturity. 

5) Can I add my family members as joint holders in SCSS?

You can only add your spouse  as a joint holder in SCSS. Other family members can be added as nominees to the account.

6) Can we close SCSS before one year?

Partial withdrawal and foreclosure are permitted in SCSS only after one year of account opening. The account can be closed after one year with a penalty of 1.5% deducted from the total deposit sum. After two years, the penalty applicable will be 1%.