All you need to know about Senior Citizen Saving Scheme


All you need to know about Senior Citizen Saving Scheme



Senior Citizen Saving Scheme was initiated by the government of India in 2014 with an aim to provide a guaranteed regular income to the senior citizens. It is one of the best schemes for or senior citizens providing high interest of 7.4% (revised quarterly). The account holders are eligible to receive quarterly disbursals against their deposited amount. It is highly safe investment has very low risk, as it is a government backed investment. Investors who prefer stable returns and regular income can invest in the Senior Citizens Savings Scheme. However, to invest in this scheme, one has to be eligible. Below are the eligibility criteria of SCSS.


Eligibility criteria
  • Indian residents of aged 60 or more are only eligible to invest in this scheme. Individual aged between 55 to 60 can also invest in the scheme only if they are retired according to the VRS and superannuation rules. Also, they will have to open the SSC account within one month from the date of receipt of the retirement benefits.
  • There is no age limit for the retired defense personnel to apply for the scheme however there are other terms and conditions to be fulfilled by them.
  • HUF members not eligible under this scheme.


Minimum and maximum criteria on amount of Investment

The minimum deposit amount for the Senior Citizens Savings Scheme is INR 1,000 and the sum total of amount in all the SCSS accounts of the assessee cannot exceed INR 15,00,000. Further investment can be made in multiples of 1000. The amount invested in the account cannot exceed the money received on retirement.

The investments below INR, 1,00,000 can be made in cash, however, for investments exceeding INR 1,00,000, a cheque or DD is mandatory.

The minimum and maximum amount cap are for both single and joint accounts. Also, joint account can only be opened with their spouse.

Maturity and withdrawal conditions

SCSS has a tenure of 5 years.However, period can be extended for three more years on submission of form B. The extension is allowed only once and interest on the extended period would be at the prevailing rate. Extension request should be made within a year before the maturity date.

Under SCSS interest amount is paid quarterly while the principal amount can be redeemed on the maturity date. In case of premature withdrawal of the amount penalty will be charged as per the specified rates.

  • 5% of deposit amount deducted as a penalty if an exit from the scheme occurs before completion of 2 years from the date of account opening.
  • 1% of SCSS deposit deducted as a penalty if an exit from the scheme occurs between 2 years to less than 5 years from the date of account opening

No premature withdrawal allowed within one year from the opening of SCSS account.

In case of death of the account holder the account will be closed and all the maturity proceeds will be transferred to the legal heir/nominee. For deceased claims, the nominee or the legal heir will have to fill out a written application in prescribed format along with Death Certificate to facilitate the closure of the account.



Investing in SCSS also fetches tax benefit, as one can take deduction under section 80C up to 1.5 lakhs per FY, in the FY in which investment is made. But it is only available if person opts the old tax regime. If person opts new tax regime the deduction under the section won’t be available.

The interest received under the scheme is taxable in the hands of the depositors. However, senior citizens can claim deduction under section 80TTB for the maximum up to Rs 50,000 in a single financial year.

In case the interest per annum exceeds 50000, TDS will be applicable.


How can one invest in SCSS

There are various public or private banks and post office providing the facility to open an SCSS account. The procedure is as follows:

  1. Visit the nearest public or private bank branch or post office branch.
  2. Fill the SCSS Form A
  3. Carry original identify and address proof for verification, and submit the photocopies of them
  4. Submit age proof.


Documents required are:

  • Aadhar Card
  • Telephone Bill
  • Voter ID
  • PAN Card
  • Electricity Bill
  • Passport
  • Senior Citizen Card/ Birth Certificate
  • Two passport-sized photographs

Self-attested photocopies of all the documents mentioned above are required to be submitted at the account opening branch.


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