The Senior Citizens Savings Scheme (SCSS) is a government backed small savings scheme for people aged 60 and above. It gives a regular quarterly income and is considered one of the safest options for retirees.
Who can invest
- Individuals aged 60 years or more.
- Retired civilian employees aged 55 to 60, who invest within one month of receiving retirement benefits.
- Retired defence personnel aged 50 to 60, within one month of receiving retirement benefits, as per the rules.
An account can be opened singly or jointly with the spouse only.
Deposit limits
- Minimum: Rs 1,000, in multiples of Rs 1,000.
- Maximum: Rs 30 lakh in total across all SCSS accounts of an individual. The limit was raised from Rs 15 lakh in the Union Budget 2023-24.
Interest
The interest rate is set by the government every quarter and is among the higher rates of small savings schemes. The rate at the time of opening applies for the whole tenure. Interest is paid every quarter on April 1, July 1, October 1 and January 1. Check the current rate on the National Savings Institute or India Post website.
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Tenure and extension
The account matures in five years. It can be extended for a further three years at a time, any number of times, as per amended rules. The extension must be applied for within a year of maturity.
Premature closure
- Before one year: interest paid is recovered from the deposit.
- After one year but before two years: 1.5 percent of the deposit is deducted.
- After two years but before five years: 1 percent is deducted.
Tax rules
- Deposits qualify for Section 80C deduction up to Rs 1.5 lakh under the old tax regime.
- Interest is taxable as per your income slab.
- TDS applies if interest exceeds the limit set for senior citizens under Section 194A. Senior citizens can submit Form 15H if their total income is below the taxable limit.
Where to open
At any post office or at authorised banks. You need KYC documents, PAN, Aadhaar, a photograph and proof of age.
Who should consider it
SCSS suits retirees who want a safe, fixed quarterly income. Since interest is taxable, compare it with other options based on your tax slab.
Bottom line
The Senior Citizens Savings Scheme offers government backed safety, quarterly payouts and a high deposit limit of Rs 30 lakh.
Source / स्रोत: National Savings Institute, India Post: Savings schemes, Department of Economic Affairs
