A Complete Guide to Senior Citizen Savings Scheme (SCSS) - Everything You Need to Know

Benefits of Investing in SCSS

• High-Interest Rate: The interest rate offered on the SCSS is higher than most other fixed deposit schemes, providing senior citizens with a higher return on their investment.
• Tax Benefits: Depositors can claim tax benefits under Section 80C of the Income Tax Act, 1961, on the deposit made in the SCSS account.
• Premature Withdrawal: The scheme provides an option for premature withdrawal with a penalty, which can be useful in case of an emergency.
• Safe and Secure: The scheme is backed by the government, making it a safe and secure investment option for senior citizens.
• Easy to Open: The process of opening an account under the SCSS is simple and can be done at any designated post office or authorised bank branch.
• Eligibility: Indian citizens aged 60 years and above are eligible to open an account under the SCSS. Retired personnel of defence services aged 50 years and above can also open an account under this scheme.

Eligibility

• Indian citizens aged 60 years and above are eligible to open an account under the SCSS.
• Retired personnel of defence services aged 50 years and above can also open an account under this scheme.

Deposit Limit

• The minimum deposit amount is Rs. 1000, and the maximum deposit limit is Rs. 15 lakhs.
• One can open more than one account under SCSS, but the deposit in all accounts should not exceed the maximum deposit limit of Rs. 15 lacks.

Tenure

• The tenure of the scheme is five years, which can be extended for another three years.

Interest Rate

• The interest rate on the SCSS is subject to change every quarter.
• It is always advisable to check the current interest rate before investing.

Tax Benefits

• The interest earned on the deposit is fully taxable.
• However, depositors can claim tax benefits under Section 80C of the Income Tax Act 1961.

Account Types

• There are two types of accounts under SCSS: single and joint.
• A single account can be opened by an individual, while a joint account can be opened by two individuals.

Process of Opening an Account

• Obtain the SCSS application form from the designated post office or authorised bank branch.
• Fill out the application form with the required personal and financial information.
• Attach photocopies of your ID and address proof, a passport size photograph, and self-attested photocopy of your PAN card, and a self-attested photocopy of your age proof.
• Submit the application form along with the required documents and the minimum deposit amount of Rs. 1000.
• The bank or post office will verify the documents and the information provided in the application form.
• Once the verification is complete, the bank or post office will issue an account number and a passbook for the SCSS account.

Premature Withdrawal

• Premature withdrawal is an option available under the SCSS that allows depositors to withdraw their deposits before the maturity date of the scheme.
• However, there are certain conditions that need to be met and penalties that need to be paid for premature withdrawal.
• The account should have completed one year from the date of deposit.
• The premature withdrawal should not exceed one deposit in an account.
• The deposit should be paid in full on the date of premature withdrawal.

• A penalty of 1.5% of the deposit will be imposed if the account is closed before the completion of two years from the date of deposit.
• A penalty of 1% of the deposit will be imposed if the account is closed after the completion of two years but before the completion of five years from the date of deposit.
• No penalty will be imposed if the account is closed after the completion of five years from the date of deposit.