What Is Senior Citizen Saving Scheme?

Senior Citizen Saving Scheme(SCSS) is a government-backed scheme to help senior citizens plan for their retirement or have financial stability after they reach 60 years of age. 

Apart from serving as a regular stream of income for senior citizens, the scheme also provides tax benefits making it an effective scheme for long-term savings.  

What Is Senior Citizen Saving Scheme?

The Senior Citizen Saving Scheme (SCSS) is a government-sponsored retirement program. The SCSS allows senior citizens living in India to invest a lump sum and receive regular income along with tax benefits. 

Senior citizens can open an SCSS account in a Post Office branch or any authorized bank to get the benefits of it. 

How To Open A Senior Citizen Saving Scheme Account?

• Go to your nearest post office or any authorized bank (see list below).

• Request for a SCSS application form and fill in the necessary details.

• Along with the form, submit the following documents -

  • Two passport-size photographs

  • Identity proof - Aadhaar card, PAN card, passport, or Voter ID

  • Proof of address - Aadhaar card or telephone bills

  • Proof of age - Birth certificate, senior citizen card, voter ID, PAN card

• Post submission, deposit the money(multiples of Rs. 1000).

• The bank will process your request and open an SCSS account in your name.

• You can also add nominees to the account.

Which Banks Offer Senior Citizen Saving Scheme?

Senior citizens can open an SCSS account in the following banks -

• Andhra Bank

• Allahabad Bank

• Bank of Baroda

• Bank of India

• Bank of Maharashtra

• Canara Bank

• Central Bank of India

• Corporation Bank

• Dena Bank

• Indian Bank

•  Indian Overseas Bank

• Oriental Bank of Commerce

• Punjab National Bank

• State Bank of Bikaner & Jaipur

• State Bank of Hyderabad

• State Bank of India

• State Bank of Mysore

• State Bank of Patiala

• State Bank of Travancore

• Syndicate Bank

• UCO Bank

• Union Bank of India

• United Bank of India

• Vijaya Bank

• IDBI Bank Ltd.

• ICICI Bank Ltd.

Who Is Eligible To Invest In The Senior Citizen Saving Scheme?

Individuals who fulfill the following eligibility criteria can invest in SCSS -

• An individual who is 60 years of age or older 

• Individuals over the age of 55 who are under the age of 60 and have retired on pension savings 

• Individuals who have reached the age of 55 and retired prior to the implementation of the SCSS rules 

• Retired defense personnel over the age of 50 and under the age of 60. The investment, however, must be made within one month of receiving retirement benefits.

However, Non-Resident Indians (NRIs) and Hindu Undivided Families (HUF) are not eligible to apply for SCSS.

What Are The Features & Benefits Of the Senior Citizen Saving Scheme?

Features Of Senior Citizen Saving Scheme

• The SCSS account should be opened with a minimum deposit of Rs. 1000

• The government also hiked the investment limit from Rs. 110 Lakhs to Rs. 30 lakhs 

• The current interest rate of the scheme stands at 8%

• The account matures after 5 years from the date of opening and it can be further extended up to 3 years by the depositor within a year from the date of maturity

• Both spouses can open separate accounts as well as joint accounts with each other. However, the entire deposit in a joint account is only attributed to the first account holder

• The depositor can nominate one or more persons as the nominee and cancel or change the nomination at any time

• Multiple withdrawals from the account are not permitted 

• After you open an account, you will be able to receive quarterly disbursements against your deposited amount.

Benefits Of Senior Citizen Saving Scheme:

• This government-supported scheme is very secure and reliable

• The scheme allows for an extension after the expiry of the account and permits premature withdrawal

• As a depositor, you can make deposits or withdraw the amount in any part of the country as the account is transferable

• The simple process of opening an account at any bank or post office makes this scheme easy to access for any citizen

• Individuals who invest in the scheme benefit from the high rate of interest

• Additionally, depositors are eligible for an income tax deduction of up to Rs.1.10 Lakhs under Section 80C of the Indian Tax Act, 1961

What Are The Disadvantages Of The Senior Citizen Saving Scheme?

While the scheme is highly beneficial to retirees, it also has a few drawbacks everyone must be aware of. The disadvantages of the Senior Citizen Saving Scheme are as follows:

• The interest earned on the deposits is subject to TDS

• Depositors can not invest more than Rs. 30 lakhs and any amount that exceeds this limit is deposited back into your personal account

• The interest earned is deposited into the contributors’ account every quarter, preventing them from profiting from compounding

• Moreover, increasing inflation can decrease the value of the investment by the time the depositor retires

Senior Citizen Saving Scheme is one of many schemes implemented by the government to make the life of retirees or senior citizens easier. 

It is reliable, secure, and offers various benefits to depositors. The application process for the Senior Citizen Saving Scheme is very simple and accessible as it can be done at a bank or the nearest post office. Additionally, understand the drawbacks of the scheme before you choose to invest in it.