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Senior Citizens Savings Scheme (SCSS): Complete Guide

The Senior Citizens Savings Scheme or SCSS is an investment and savings plan sponsored by the Indian government in collaboration with Public Sector Undertaking (PSU) banks, India Post and certain private banks too. It allows persons over the age of 60 to earn a very high interest rate and get a monthly income on their savings.

The SCSS gains special significance since in recent months: the Indian government is planning to exempt senior citizens over the age of 75 from filing Income Tax returns if their only source of income is interest from bank deposits and pension.  Instead, banks are now authorized to deduct taxes at source on large savings deposits held by senior citizens. Therefore, the SCSS enables senior citizens to save a lot of money they would otherwise pay as Income Tax. 

This makes SCSS a superb choice for senior citizens having a lot of money to invest but also wish to get a monthly income from their savings.

Senior Citizens Savings Scheme (SCSS) Complete Guide

Which Banks have Senior Citizens Savings Scheme (SCSS) Accounts?

If this sounds interesting and you’re willing to invest money in SCSS, continue reading. Because I’m presenting a complete guide to investing in SCSS for every senior citizen who’s a resident of India.

The first and most obvious step is to open an SCSS account for yourself or your spouse or even jointly. 

Here’s a List of PSU banks that offer SCSS

  • State Bank of India
  • Bank of India
  • Central Bank of India
  • Union Bank of India
  • Bank of Maharashtra
  • Punjab National Bank
  • India Post Bank
  • Bank of Baroda
  • Indian Bank
  • Indian Overseas Bank
  • IDBI Bank

You can enquire with your bank if they accept SCSS deposits since more and more banks are joining the list for this Central government sponsored savings scheme for senior citizens, at the time of writing this article.

Maximum/ Minimum Deposits Under Senior Citizens Savings Scheme (SCSS)

This brings us to a question, how many SCSS accounts can an individual have? Actually, you can have one or more SCSS accounts at one or different banks. However, the maximum amount of cash deposits in all these accounts should not be above Rs.1.5 million. The minimum deposit for opening an SCSS account is Rs.1,000 only and in its multiples.

This means, you can also open an SCSS account in the name of your spouse, if she’s a senior citizen- over the age of 60- at the time of opening the account.

However, there’s one rider. The amount of money that you deposit in the SCSS account has to come from your retirement benefits only. This means, you can’t deposit money that comes from other sources. You might have to submit a proof of your income to show that the money you’re depositing in an SCSS account is fully or partly from your retirement benefits.

Retirement benefits means provident fund dues, retirement or superannuation gratuity, commuted value of pension, leave encashment, 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.

Eligibility to Open Senior Citizens Savings Scheme (SCSS) Account

To be eligible to open an SCSS account, you need to be a resident of India. Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and Hindu Undivided Families (HUF) or trusts cannot open an SCSS account.

You have to be over 60 years of age or more at the time of opening the SCSS account. However, if you’ve availed Voluntary Retirement Scheme (VRS) and have proof of the same, an SCSS account can be opened by any Indian who is 55 years and above, provided they don’t have any other employment.

Retired personnel of the Indian Armed Forces as well as paramilitary forces that’re over the age of 50 years can also open an SCSS account with their retirement benefits.

At the same time, you cannot open one more SCSS account at the same branch of a bank or Post Office during the same calendar month.

Interest on Senior Citizens Savings Scheme (SCSS) Accounts

Now let’s look at reasons why the SCSS account is best suited for senior citizens. Firstly, it attracts an interest rate of 7.4 percent per annum. The interest is calculated every quarter and paid to the account holder once in every three months.

You will get direct credit of the interest in your Savings Bank account at the Post Office or any other bank that you designate to receive the funds, through Electronic Clearance System (ECS). At 7.4 percent. interest rate and with investment of Rs.1.5 million, you can get a monthly income of Rs.9,250 per month. This means, if your spouse and you hold two SCSS accounts, your monthly income would be Rs.18,500.

All SCSS accounts have a tenure of five years. However, the depositor has the option to close an SCSS account prematurely. Upon completion of the five years tenure, you can extend it by another three years and so on.

Your income from SCSS accounts as interest is exempt from Income Tax under Section 80-C, which makes it an added attraction.

How to Open an Senior Citizens Savings Scheme (SCSS) Account

The Indian government has made it very simple for senior citizens to open an SCSS account. All that you need to do is visit any of the PSU bank branches or the Post Office and open the account.

The SCSS account requires full, Know Your Customer formalities. This means, you will require a photo ID proof such as Aadhar card along with PAN card or other similar documents.

You have to prove that you or your spouse is above the age of 60 years to open the account. Central and state government employees that have availed VRS would have to prove they’re 55 years or more. Retired members of the Indian Armed Forces have to prove they’re over 50 years old.

You can nominate anyone to claim the money in your SCSS account upon death. However, if you’re nominee is a minor, you need to designate an adult who would act on behalf of the child.

Senior Citizens Savings Scheme (SCSS) Account

Scheme / Yojana Name Senior Citizens Savings Scheme (SCSS)
Yojana Beneficiaries Senior Citizens aged above 60
Page Category Sarkari Yojana
Scheme Objective It allows persons over the age of 60 to earn a very high interest rate and get a monthly income on their savings.
Official Website
Interest Rate7.40% per annum

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In Conclusion

An SCSS account is one of the most significant ways to save money on Income Tax and get a monthly income, for senior citizens. It is also one of the safest investments for senior citizens since the scheme is administered by the Indian government.

A salient feature of SCSS is that your investment remains safe even as you get a monthly income. You can withdraw your investment anytime or your heirs can inherit the money.

The scheme is also available across India through over 150,000 post offices and nearly 30,000 branches of the State Bank of India along with branches of other banks.

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