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Senior Citizen Savings Scheme | 2018-19

In every society, senior citizens are always given the special place and consider them as the head of the family. In India, any people who have attained the age of sixty years or above are considered as senior citizens.

And in order to acknowledge their contributions and help them retiring gracefully, Government of India honours them by offering them wide range of attractive programs and facilities. The ‘Senior Citizen Savings Scheme’ (SCSS) is one of them.

Senior Citizen Savings Scheme (SCSS) is a government program for the senior citizens (who are above the age of 60 years) to provide them additional retirement benefits while availing day to day cash requirements.

This scheme is considered to be one of the safest investment schemes as it is backed by the government. These schemes are available through banks and post offices which are associated with SCSS. The SCSS account can be elongated for 5 years and upon maturity can be extended for 3 more years. Under this scheme, depositors are permitted to make one deposit into this account.

Senior Citizen Savings Scheme is a well – made, shielded and a highly targeted savings scheme among the senior citizens of India.

Interest Rates for Senior Citizen Saving Scheme

Below is the table of interest rate for the first quarter of Financial Year 2017 – 18 i.e. April 17 to June 17.

Investment Option Rate of Interest for Quarter 1: April 17 to June 17
Senior Citizens Savings Scheme (SCSS) 8.40%

Benefits under Senior Citizen Savings Scheme

SCSS is a very beneficial product for senior citizen in India as it offers one of the best interest rate among the other government programs along with customised facilities in order to fulfil every requirement of the senior citizens.

Read below to know some of the benefits of Senior Citizen Savings Scheme (SCSS)

  • This scheme offers a hassle free processing where an interested applicant have to just fill up an application form at their nearest post office or a local bank along with required documents and initial deposits in order to get the account opened.
  • This scheme is the most reliable scheme as it is backed by the government itself; hence it comes with all the protection and assertion associated with the government schemes.
  • It offers the option of handling multiple accounts at the same time which could be either operated as singly or jointly with the subscriber’s spouse.
  • This scheme is offering a very attractive interest rate which is of   8.6% per annum.
  • ‘Senior Citizen Savings Scheme’ encourages senior citizens to save as it is a medium for a long term investment product as this account offers 5 years maturity term period and can be further extended for 3 more years.
  • This investment scheme is eligible for a tax rebate of under section 80 C, of the Income Tax Act, 1961. Hence, it is extremely helpful in saving tax.
  • This scheme is flexible in investment amount as in this scheme one can invest any amount in multiples of Rs. 1000 up to the maximum cap of 15 lakhs. However, this can be done only once. And the amount plus interest can be directly credited into the depositor’s savings bank account held with the bank branch or to the linked Post Office Savings account.
  • The subscribers of this scheme can prematurely withdraw from their SCSS scheme. However they would be subjected to the penalty of 1.5% of the funds till 2nd year of completion and 1 % post 2 years till the 5th year.
  • As this scheme is designed for the senior citizens, the process of enrollment has been kept simple and hassle free. The only documents which are required are age – cum ID proof, it could be Passport, Voter’s ID, Birth Certificate, Aadhaar Card, PAN card, Senior Citizens Card etc.

Eligibility Criteria for Senior Citizen Savings Scheme

As the name suggest, this scheme is only for the senior citizens of the country i.e. individuals aged 60 years or above are eligible to subscribe to this scheme.

However, any individual who is not 60 years yet, but have attained 55 years of age and have taken VRS (Voluntary Retirement Scheme), can also apply for this scheme and the account should be open within 1 month of the receipt of retirement benefits.

At the same time, any retired defence official irrespective of above mentioned age limits are eligible to subscribe to this scheme, however, they are subjected to other terms and conditions.

Hindu Undivided Families (HUF) or Non Resident of India (NRIs) are not eligible for the scheme.

How to Open a SCSS Account

Interested people can open a SCSS account by visiting a local bank or by visiting nearest post office

Opening a SCSS account by visiting Post Office

As we know Indian Postal System still has a reach in the remotest India. Hence most of the government sponsored schemes are available in Indian Post Office. The SCSS is hence also offered at all the Post Offices of India. And this scheme has indeed flourished at post offices as the non – urbanized population can also easily access to this scheme at the post office

Opening a SCSS account by visiting an authorized Bank

There is a selected public / private sector bank which offers SCSS account. The reason this scheme is offered through a bank as well because banks today facilitates people with round the clock service and they have branches in most of the rural areas.

Read below to know the list of banks which offers SCSS account:

  • Allahabad Bank
  • Andhra bank
  • State Bank of India
  • State Bank of Mysore
  • State Bank of Bikaner and Jaipur
  • State Bank of Patiala
  • State Bank of Travancore
  • State Bank of Hyderabad
  • Bank of Maharashtra
  • Bank of Baroda
  • Bank of India
  • Corporation Bank
  • Canara Bank
  • Central Bank of India
  • Dena Bank
  • Syndicate Bank
  • UCO Bank
  • Union Bank of India
  • Vijaya Bank
  • IDBI Bank
  • Indian Bank
  • Indian Overseas Bank
  • Punjab National Bank
  • United Bank of India


Does SCSS scheme offer a joint account facility?

Yes, joint account facility is available in SCSS scheme. However, the joint account can be opened only with the spouse.

What should be the age of the spouse in case of a joint account?

In case of a joint account, age of 1st applicant / depositor is the only factor to decide the eligibility to invest under the scheme. There is no age bar/limit for the 2nd applicant / joint holder.

What is the rate of TDS Deduction in SCSS?

The rate of TDS is 10%. However the real tax liability can calculate after adding the interest amount into total taxable income.

Can I use the retirement’s benefits for deposits under the senior citizen saving scheme?

If the investor is above 60 years, the source of amount does not matter. However, if the investor is 55 years or above but below 60 years and has retired under a voluntary scheme or has retired from the Defence services, only the retirement benefits can be invested in the SCSS.

Is there any time limit to invest retirement benefit in SCSS?

If the investor is 60 years and above, there is no time limit to open SCSS account. However for those below 60 years, there are some time limits

A person who has attained the age of 55 years or more but less than 60 years and who has retired under a voluntary retirement scheme must open the SCSS account within three months of the date of retirement.


Comparing PPF, NSC, Sukanya Samridhi & Senior Citizens Saving Scheme

Savings and investments are two most important concepts in the Financial Industry.

Investment basically means that “any money that is spent today in the hope of financial benefits that may be reaped in a future time frame”. In other words investment is an asset that is purchased with the hope that it will generate income in the future.

There are different instruments of investment and every instrument has specific features and one should choose their investment instrument according to their need.

Below is the list of some of the most popular small savings scheme

PPF (Public Provident Fund)

PPF (Public Provident Fund) is a long term savings and tax savings instrument in India, introduced by the government in 1968. PPF scheme is administered by the provisions of Public Provident Fund Act 1968. Deposits made towards the PPF account is eligible for deduction under Income Tax Act and the interest earned on it is exempted from tax.

Features of Public Provident Fund (PPF)

Interest Rates – 7.8%

Tenure – 15 years

Initial Investment / Deposit – Rs. 100

Annual Deposit Amount – Rs. 500 – Rs. 1.5 lakhs per year

Deposit Frequency – every year for 15 years

Deposit Modes – Via cash, cheque, DD, online funds transfer

Nomination – Allowed

Loan Facility – From Year 3 to year 6

Renewal – Allowed, for an extra 5 years at a time

Withdrawals – Every year from year 7. Also complete withdrawal of funds can be made only at maturity.

Benefits of investing in a PPF scheme

In PPF the deposit period is of 15 years and a lock – in period is of 7 years which means this scheme serves as a long term investment goal. Investing in PPF is an ideal option for building a retirement corpus as it serves as a long term investment, tax returns and capital protection. PPF is one of the most low risk investment schemes as it is backed by the government itself.

Public Provident Fund (PPF) is governed by the Public Provident Fund Scheme 1968 and it scrutinizes over the eligibility criteria, documentation requirement, opening, maintenance and operation of a PPF account including loan facilities, withdrawals, closure, and extension of accounts among other things.

Eligibility Criteria

Enrolling into PPF scheme is open to Indian Residents only who are of 18 years or above than that as there is no upper age limit to open an account in PPF. Also, HUF (Hindu Undivided Families) or NRIs (Non – Resident of India) or Foreigners are excluded from the scheme.

NSC (National Savings Certificate)

National Savings Certificate is an Indian Government savings bond which is meant for small savings and income tax savings investments in India. Under this scheme interested people can invest their money and will receive a certificate in turn, containing the particulars of their investments. This scheme is considered to be one of the safest investment options.  The money you invest in NSC is safe and you receive interest on your investment. Maturity period of NSC is 5 years. In order to invest in NSC, you can visit your nearest post office and enrol in it. This scheme also offers the facility to transfer your investment from one post office branch to another. It also provides nomination facility, after your death.

Features of National Savings Certificate (NSC)

This scheme has a variety of attractive features such as it can be purchased from any post office in India. If any subscriber wants to have a joint account, they can open a joint account as well. The minimum amount of investment in NSC is Rs. 100 and there is no limitation on maximum investment, i.e. any individual can investment any amount they like. However, income tax benefit will be available only up to Rs. 1.5 lakhs. The NSC certificate is available in the denomination such as Rs. 100, Rs. 500, Rs. 1000, Rs. 5000, and Rs. 10,000. Under this scheme the subscribers are allowed to avail loans as well.

Benefits of investing in a NSC Scheme

There are multiple benefits of purchasing National Savings Certificate (NSC) such as the interest can be tax free except for the interest that is earned in the last year. Investments made in an NSC come under 80 C of the IT ACT and afford the investor tax benefit. Also, NSC is a one time investment scheme where the minimum investment amount is Rs. 100 which is a very nominal, hence, it is within the reach of common man and anyone can buy this scheme.  NSC also works as a guarantee certificate and it also carries a lower rate of interest as compared to personal loans. In case you misplace your NSC certificate; you can get a duplicate one as well.

Sukanya Samridhi Yojana (SSY)

Sukanya Samridhi Yojana is a popular government schemes launched by the Prime Minister, Shri Narender Modi, which targeted at the parents of a girl child for their betterment. This scheme would encourage the parents to build a fund for the future education and other needs and expenses of their female child. This scheme has managed to reach a wider audience in the country as it is a great step towards providing financial security and financial independence to women.

Benefits of Sukanya Samridhi Yojana

According to the financial experts, availing this scheme would provide great benefits to the subscribers as it offers attractive rate of interest of 8.6% per annum which is more than that offered by most other schemes in the market. However, this rate if revised every year by the Finance Minister. An investment made under this scheme is also exempted from income tax under section 80 C of the Income Tax Act, 1961. Under Sukanya Samridhi Scheme, partial withdrawal is allowed on account of marriage or higher studies, once the girl child attains the age of 18 years of age. This scheme is meant for a girl child who is 10 years or old. And the account can be opened by the parents or guardian of the girl child and can be operated on her behalf until she reaches the age of 18 years. The scheme will mature after 21 years from the date of opening the account. The maximum amount that can be deposited in this account is Rs. 1, 50,000.

Senior Citizens Savings Scheme (SCSS)

In every society, senior citizens are always given the special place and consider them as the head of the family. In India, any people who have attained the age of sixty years or above are considered as senior citizens.

And in order to acknowledge their contributions and help them retiring gracefully, Government of India honours them by offering them wide range of attractive programs and facilities. The Senior Citizen Savings Scheme (SCSS) is one of them.

Senior citizen savings scheme boast of one of the best interest rates for any government sponsored investment product in India. As it is designed for the senior citizens, the procedure of applying for it kept extremely simple. To avail Senior citizen savings scheme fill up a simple application form at your local bank or post office and that’s the procedure. This scheme comes with all the security and assurance as it is backed by the Government of India. Under SCSS, a single applicant can open multiple SCCC account either individually or with joint investors. Also Senior Citizens Savings Account offers attractive returns i.e. 8.6% per annum. SCCC matures in 5 years but can be stretched for another 3 years, hence; it can be treated as a long term and both medium term investment schemes.

Features Public Provident Fund (PPF) NSC (National Savings Scheme) Sukanya Samridhi Senior Citizens
Interest Rates 7.8% 7.8% 8.3% 8.3%
Tenure 15 years 5 years 14 years 5 years
Risk factor Risk – free Risk – free Risk – free Re – investment risk
Account Opening Anyone Anyone Only guardian who have girl child Senior Citizens
Where to open Post Office / Bank Post Office Post office / bank branch Post office


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