Senior Citizen Savings Scheme (SCSS)

A Senior Citizens’ Saving Scheme (SCSS) is a government-backed retirement benefits programme. Senior citizens resident in India can invest a lump sum in the scheme, individually or jointly, and get access to regular income along with tax benefits.

Senior Citizens Savings Schemes can be availed by any individual above the age of 60 years. They are effective savings options for the long term and offer attractive features and unmatched security.

The Senior Citizens Savings Scheme (SCSS) was launched with the main aim of providing senior citizens of the country a regular income after they attain the age of 60 years old. Some of the main benefits of the scheme are:

• Tax benefits are provided
• Safe to invest in the scheme
• Interest rate has been reduced from 8.6% to 7.4%
• Premature withdrawal is allowed

The scheme comes with various security features and provides individuals a savings option for the long run. The SCSS is available at post offices and certified banks across the country.

Senior Citizen Savings Scheme Features

The main features of the Senior Citizens Savings Scheme are mentioned below:

• Maturity of the scheme: The maturity period of the scheme is 5 years. However, individuals can extend the maturity duration for 3 years by submitting an application in the required format within one year of maturity of the account. However, the account can be closed without any charges after the expiry of the account.
• Nominations: Nominations can be added to the policy at the time of opening an account or after the account has been opened.
• Number of accounts: Individuals are allowed to operate more than one account by themselves or open a joint account with their spouse. However, joint accounts can be opened only with the spouse and the initial depositor is the investor of the joint account.
• Minimum and maximum amount: Only a single deposit is allowed to be made in the account. It can be in the multiples of Rs.1,000 and the maximum amount that can be deposited is Rs.15 lakh. Deposit amounts less than Rs.1 lakh can be paid by cash, while amounts more than Rs.1 lakh must be paid by cheque. In case of cheque payments, the date the cheque realises will be the opening date of the account.
• Transfer of an account: An SCSS account can be transferred from a bank to a post office and vice versa. The process to open an SCSS account is also easy and hassle-free.
• Premature withdrawal: After one year of opening the account, premature withdrawal is allowed. However, a 1.5% charge and a 1% charge of the total amount deposited will be charged in case of premature withdrawals after 1 year and 2 years, respectively.

How Senior Citizen Savings Scheme works?

Here is how an SCSS account works:

1. Open an SCSS account by depositing a minimum amount of Rs.1,000 up to Rs.15 lakh in a single instalment.
2. The deposit amount is restricted to the retirement benefits received and must be deposited in the SCSS account within a month from the date of receiving the retirement benefits from the employer.
3. Retirement benefits here mean any payment due to the account holder on account of retirement on superannuation or otherwise. It includes 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.
4. If the deposit is in excess to the ceiling amount, the excess amount shall be refunded to the account holder immediately.
5. Interest on the deposit will be paid once every quarter.
6. Interest can be drawn through auto credit into the savings account held at the same Post Office branch or through ECS.
7. The account can be prematurely closed at any time, after the date of opening.
8. The account may be extended for a further period for 3 years from the date of maturity.
9. The extension can be done within 1 year from the date of maturity.

Senior Citizen Saving Scheme – Documents required

Proof of ID and address (any one of the following):

• Aadhaar card
• Passport
• Driving licence issued by Regional Transport Authority
• Voter ID card
• Job card issued by NREGA signed by State Government officer

Additional documentation if investor is less than 60 years:

• Certificate from the employer indicating the details of retirement on superannuation or otherwise, retirement benefits, employment held and period of such employment with the employer
• Proof of date of disbursal of retirement benefits (the date of opening of an account under this Scheme should be within one month of the date of receipt of the retirement benefits)

In addition to the above documents, PAN card is mandatory.

Senior Citizen Savings Scheme Eligibility

The eligibility criteria for the SCSS are mentioned below:

• An individual who has attained the age of 60 years or above at the time of opening an SCSS account.
• Individuals who have attained the age of 55 years old, but are below the age of 60 years old and have retired on superannuation are eligible to open an SCSS account.
• Individuals who have attained the age of 55 years old and have retired before the implementation of the SCSS rules are eligible under the scheme.
• Under the SCSS, retired Defence Services personnel are eligible irrespective of their age. However, certain other specific conditions must be met by these individuals.
• Non-Resident Indians (NRIs) are not eligible to open an SCSS account.
• Hindu Undivided Families (HUF)’s are not eligible to open an SCSS account as well.

Who can invest in SCSS?

Resident individuals who satisfy the following criteria can invest in SCSS:

1. Senior citizens of India aged 60 years or above
2. Citizens who have opted for the Voluntary Retirement Scheme (VRS) or Superannuation and in the age bracket of 55-60 years
3. Retired defense personnel above 50 years of age and below 60 years of age
4. HUFs and NRIs are not allowed to invest in this scheme
5. The investment has to be done within a month from the date of receiving the retirement benefits

Tax benefits under the SCSS

Under Section 80C of the Income Tax Act, 1961, individuals are eligible for tax deductions on investments up to Rs.1.5 lakh. In case the interest generated is more than Rs.10,000 p.a., the tax will be deducted at source.

Where and How to open an SCSS account?

You can open an SCSS account either at an authorised bank branch or at a Post Office branch. If the bank allows, you can open the SCSS account online on the bank’s internet banking portal or mobile banking app. There is no option to open the SCSS account online with the Post Office.

As of now, there is no option for you to open an SCSS account online. Neither do the authorised banks nor the Post Office provides you a platform to open the account online. Please follow the steps provided above to open the account offline.