Features of the Senior Citizen Savings Scheme
Feature
|
Details
|
Tenure
|
5 years
|
Interest rate
|
8.2% p.a. (2025-26)
|
Minimum investment
|
Rs. 1,000
|
Maximum investment
|
Rs. 30,00,000
|
Tax benefits
|
Up to Rs. 1.5 lakh under Section 80C
|
Compounding
|
Quarterly and Paid
|
- Guaranteed returns: As a government-backed instrument, the SCSS provides assured returns, offering a secure investment option compared to market-linked investments.
- Maturity period: The SCSS scheme has a fixed maturity period of 5 years, but individuals have the option to extend it for an additional 3 years by submitting Form B at concerned post office.
- Deposit limits: To open an account under the Senior Citizen Scheme, a minimum deposit of Rs. 1,000 is necessary, and there is a maximum deposit limit is Rs. 30 lakh.
- Prematurely withdrawal: If you prematurely withdraw your amount before completion of 1 year, you won't get any interest, if you withdraw it after 1 year but before 2 years, a 1.5% penalty is charged from the principal amount and if you withdraw after 2 years but before 5 years, a 1% penalty is charged.
- Nomination option: Account holders can nominate a beneficiary for the Senior Citizens Saving Scheme, so if the account holder passes away before the account matures, the nominee will receive the due amount.
SCSS latest interest rate
The Senior Citizen Savings Scheme (SCSS) offers an interest rate of 8.2% per annum for the second quarter of the financial year 2025–26. This rate is valid from July 1, 2025, to September 30, 2025.
Senior Citizen Savings Scheme Interest Payout Schedule
Quarter
|
Interest Payout Date
|
April – June
|
1st July
|
July – September
|
1st October
|
October – December
|
1st January
|
January – March
|
1st April
|
How does the Senior Citizen Savings Scheme work?
- Open an Sr Citizen Saving Scheme account with a single installment by contributing Rs. 1,000 up to Rs. 30 lakh.
- The amount must be deposited within one month from the date of receiving the retirement benefit from the employer.
- The retirement benefit includes:
- Retirement or superannuation gratuity
- Leave encashment
- Retirement-cum-withdrawal benefit under the Employees’ Family Pension Scheme
- Ex-gratia payments under a voluntary or special voluntary retirement scheme
- Provident fund dues
- Commuted value of pension
- Savings element of Group Savings Linked Insurance Scheme payable by the employer on retirement
- If the deposit exceeds the ceiling amount, the excess will be refunded immediately to the account holder.
- Interest is credited to the account every quarter.
- Interest can be withdrawn through ECS (Electronic Clearing Service) or auto credit mode via the post office.
- The account can be closed prematurely anytime after the date of account opening.
- The account can be extended for another three years from the date of maturity.
- The extension must be done within one year from the date of maturity.
Calculation of Interest under the Senior Citizen Savings Scheme
Interest under the Senior Citizen Savings Scheme is compounded quarterly and paid out on the first day of April, July, October, and January. The key factors used in the interest calculation are:
- Principal or deposit amount
- Interest rate
- Maturity period
While the maturity period remains fixed, the deposit amount and interest rate may vary. The interest rate applicable at the time of investment is used to calculate the interest earned.
Benefits of Senior Citizen Savings Scheme
The Senior Citizen Savings Scheme (SCSS) offers several benefits:
- Ease of access: Open an SCSS account at any authorized bank or post office.
- Competitive returns: Enjoy an attractive annual interest rate of 8.2% w.e.f 01.04.2025 to 30.06.2025.
- Tax benefits: SCSS interest is exempt from income tax up to a certain limit.
- Early withdrawal: Premature withdrawal is allowed in case of medical emergencies with a penalty.
For a higher interest rate on your investment, you can consider Bajaj Finance Fixed Deposit. They offer interest rates up to 7.30% p.a. on their fixed deposits.
How to Open an Account under the Senior Citizen Savings Scheme?
Here are the steps to open an SCSS account with an authorised bank:
- Visit your nearest authorised bank branch and request an SCSS application form.
- Complete the application form with the required information.
- Attach the necessary documents to the form.
- Submit the completed application form, documents, and deposit money to the bank staff.
- The bank staff will process your application and open the SCSS account.
How to fill the Post Office SCSS application form?
- Enter the branch name of the post office.
- If you already have a savings account with the post office, enter the account number.
- In the 'To' section, specify the branch address of the Post Office.
- Attach a photograph of the accountholder.
- Write the account holder's name and select the SCSS option.
- Choose the account holder type: minor through guardian, person of unsound mind through guardian, or self.
- Select the account type: single, survivor, or all.
- Enter the deposit amount in both figures and words.
- If depositing by cheque, write the cheque number and date.
- Enter the accountholder's personal details.
- Tick the boxes at the end of the table for the provided documents.
- Fill in the SCSS details and tick the declaration box.
- The account holder must sign on both page one and two.
- Provide details of the nominee and add the account holder's signature to validate the nominee's information.
How to open SCSS Account in a bank offline
- Visit the nearest authorised bank branch and obtain the SCSS application form.
- Complete the application form by providing the required information.
- Attach the necessary documents.
- Submit the filled application form, along with the required documents and the deposit amount.
- The bank personnel will process the application and proceed to open the SCSS account.
Tax benefits under the SCSS
- Individuals can claim tax deductions up to Rs. 1.5 lakh under Section 80C of the Income Tax Act, 1961, on their investments.
- TDS is applicable if the total interest earned from all SCSS accounts exceeds Rs. 50,000 per annum.
- For account holders below 60 years of age, TDS applies if interest income exceeds Rs. 10,000 annually.
- With an 8.2% p.a. interest rate on an investment of Rs. 30 lakh, the estimated monthly income is approximately Rs. 20,500 per investor.
Eligibility for SCSS
You can open a Senior Citizen Savings Scheme (SCSS) account at a post office or authorized bank if you meet the following conditions:
- Individuals aged 60 years or above.
- Retired civilian employees aged between 55 and 60 years, provided the account is opened within one month of receiving retirement benefits.
- Retired defense personnel aged between 50 and 60 years, with the same one-month investment condition post-retirement.
- Accounts can be held individually or jointly with a spouse. In joint accounts, the entire deposit is attributed to the primary account holder.
- Non-Resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not eligible.
- Submission of PAN and Aadhaar is mandatory for account opening from 31st March 2023.
Documents required to open SCSS account
- 2 passport-size photo
- Identity proof (PAN card, Voter ID, Aadhaar card, or passport)
- Address proof (Aadhaar card or recent telephone bills)
- Proof of age (PAN card, Voter ID, birth certificate, or senior citizen card)
Note: All documents are required to be self-attested by the applicant.
Conclusion
Senior Citizen Savings Scheme (SCSS) offers a secure financial option for senior citizen. With a guaranteed returns the scheme ensures competitive interest rates, easy registration, and tax advantages. SCSS caters to the financial needs of senior citizen, promoting financial security.
For additional flexibility and potential for slightly higher returns, you can consider investing fixed deposit, which can provide flexible tenure and competitive interest rates.
Calculate your expected investment returns with the help of our investment calculators
