Understanding The Key Features of Senior Citizen Savings Scheme (SCSS)

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Monika Ahuja
Monika Ahuja
I have a specialization in finance but I have written for several domains including real estate, automobile, home decor, e-commerce etc. I worked in sales for over 4 years, before choosing to become a content writer. As a writer, I have worked closely with several national and international brands and have handled their social media and website content for over 3 years. With my diverse experience in the field of writing, I am looking forward to creating some engaging content for my readers.

Besides their well-being, financial stability is another significant concern for individuals as they grow older. As they enter into the latter years of their life, the inclination towards taking risks decreases, prompting them to seek secure options to invest their savings. Despite common assumptions, secure investment options can also yield favourable returns. 

One such option is the government-backed Senior Citizen Savings Scheme (SCSS). In the 2023 Union Budget, the government raised the maximum deposit limit to Rs 30 lakh, and currently, it offers an appealing interest rate of 8.2%. But that’s not all; there are also several other benefits associated with SCSS. Let’s delve deeper into the particulars of this scheme.

Understanding the Interest Rate

The interest rate on SCSS tends to be higher compared to other fixed-income alternatives, making it an appealing option for retirees seeking steady returns. The government sets the interest rate quarterly. Currently, it stands at 8.2%.

Who is Eligible? 

To open an account, an individual must be 60 years or older. Additionally, those between 55 and 60 years old who have retired under superannuation, VRS, or Special VRS are also qualified to open an account under the Senior Citizen Savings Scheme. For ex-servicemen, the age requirement is 50 and above.

Source of Steady Income 

The Senior Citizen Savings Scheme provides investors a consistent income through interest payments. These payments are made quarterly, with funds being credited into the individual’s account on the first day of April, July, October, and January.

Deposit Limits: 

The minimum deposit required for participation in this scheme is Rs 1,000. Meanwhile, the upper limit has been recently adjusted to Rs 30 lakh or the amount received as a retirement benefit, whichever is lower.

Deposit Methods: 

For deposits below Rs 1,00,000, individuals have the choice to deposit cash. However, for amounts exceeding Rs 1,00,000, payment must be made via cheque.

Maturity Duration: 

The savings scheme initially has a fixed tenure of five years. However, you can prolong it for an additional three years. To do so, you must submit a request to the bank within one year of maturity. This extension can only be chosen once.

Early Closure: 

While premature withdrawal is permitted, it incurs a penalty. If you close the account within one year of opening, a one-percent charge will apply. Closing the account between one and two years after opening incurs a 1.5% deduction from the principal amount. For closures between two and five years, the same one-percent charge is deducted.

Tax Advantages: 

Investments in the SCSS qualify for tax benefits under Section 80C of the Income Tax Act, with a maximum limit of Rs 1,50,000 per financial year. However, the interest earned is subject to taxation.

Account Limit: 

Individuals have the option to open multiple SCSS accounts. They can open another account either individually or jointly with their spouse.


An SCSS account can be transferred between a post office and a bank and vice versa.

Simplified Investment Process: 

Opening an SCSS account is straightforward. It can be initiated easily at any authorized bank or post office with a few simple steps.

Nomination Option: 

When initiating an account under the Senior Citizen Savings Scheme, or even afterwards, individuals can choose to nominate a beneficiary. In the event of the account holder’s demise, before the account matures, the nominated individual will receive the accumulated amount.

The Senior Citizen Savings Scheme (SCSS) stands as a reliable option for individuals seeking financial stability in their later years. With attractive interest rates, tax benefits, and flexible features such as multiple accounts and easy transferability, it offers retirees a secure avenue to invest their savings. By understanding its eligibility criteria, deposit limits, and maturity terms, individuals can make informed decisions to secure their financial future with confidence.

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