The Senior Citizen Savings Scheme was introduced in the year 2004 as a part of post office savings scheme, to provide financial security to senior citizens who are in need of a steady income post retirement.
Backed by the government, this is a very safe investment option for senior citizens. Residents aged more than 60 years, can individually or jointly open SCSS account.
It can either be opened in a post office branch or an authorized bank. It offers an interest rate of 8.2% for the current quarter. This scheme supports a maximum deposit of Rs.30 lakhs, with a tenure of 5 years which can be further extended to 3 years. Deductions under section 80C of Income Tax Act is allowed for this scheme. However, interest on deposits are fully taxable
Secure Investment
SCSS is a government-backed scheme. Hence, the invested amount is secure and there is guarantee of returns upon its maturity.
Interest
- Calculation – The Senior Citizen Savings Scheme interest rates are revised on a quarterly basis. Interest is compounded quarterly. The amount of interest paid differs based on period of deposit, interest rate and principal amount.
- Payment – Individuals who open an SCSS account get an interest on the principal deposited amount at the rate fixed by the government. Interest payment will be credited to an individual’s account on the first date of April, July, October, and January.
- Interest Rate – The interest rate for first quarter of financial year 2025-26 is retained at 8.2% per annum.
- The following are the trend in the interest rate from the year 2020.
| YEAR | RATE OF INTEREST (%) |
| 1.4.2020 to 30.09.2022 | 7.4 |
| 1.10.2022 to 31.12.2022 | 7.6 |
| 1.01.2023 to 31.03.2023 | 8 |
| 1.04.2023 to 31.06.2025 | 8.2 |
The rate of interest offered for SCSS scheme is steadily increasing from the financial year 2020.
Mode of Deposit
An individual can deposit the money in cash when the amount is below Rs.1 lakh. When the deposit amount is above Rs.1 lakh, an individual should make the payment by cheque.
Maturity of the Scheme
- The maturity period of SCSS is 5 years.
- However, individuals can extend the maturity period for 3 more years by submitting an application.
- The application for an extension of maturity should be within one year from the date of maturity.
Withdrawals from Senior Citizens Savings Scheme accounts will be exempt from tax starting August 29, 2024. Senior citizens are predominantly benefitted from this amendment.
SCSS Eligibility
Here is how an SCSS account works:
- Open an SCSS account by depositing a minimum amount of Rs.1,000 up to Rs.30 lakh in a single instalment.
- The deposit amount is restricted to the retirement benefits received.
- It must be deposited in the SCSS account within a month from the date of receiving the retirement benefits from the employer in case the employees age is between 55 to 60 years(50 to 60 years in case of retired defense employees) .
- Retirement benefits here means 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.
- If the deposit is in excess of the ceiling amount, the excess amount shall be refunded to the account holder immediately.
- Interest on the deposit will be paid once every quarter.
- Interest can be drawn through auto credit into the savings account held at the same Post Office branch or through ECS (Electronic Clearing Service).
- The account can be prematurely closed at any time, after the date of opening.
- The account may be extended for a further period for 3 years from the date of maturity.
- The extension can be done within 1 year from the date of maturity.
SCSS v/s Fixed Deposits for Senior Citizens
Nowadays, the fixed deposits offered for senior citizens have better interest rates compared to the interest rates offered for others. At this point, an introspection is required whether the Senior Citizen Savings Scheme is a better choice as compared to fixed deposits offered for senior citizens.
The following table presents a comparative analysis between Fixed Deposits and Senior Citizen Savings Scheme.
| Feature | Fixed Deposit (FD) | Senior Citizens Savings Scheme (SCSS) |
| Interest Rate Fluctuations | Varies with market and economic conditions. | Stable and government-declared. |
| Tenure | 6 months to 10+ years (flexible). | Fixed 5 years (extendable by 3 years) |
| Maximum Deposit Limit | Generally no upper limit (varies by bank) | ₹30 lakhs |
| Eligibility (Age) | Open to all; senior citizens (60+) get extra interest | 60+; Retired civilians (55+), retired defense personnel (50+) |
| Tax Benefit (Section 80C) | Only on 5-year tax-saving FD. | All SCSS deposits – tax benefit available. |
| Premature Withdrawal | Usually allowed with a reduced interest rate | Allowed with a penalty depending on the withdrawal period |
| Safety | Depends on the bank’s credibility | Backed by Government of India (very safe) |
How to Apply for SCSS Scheme?
Nowadays, the fixed deposits offered for senior citizens have better interest rates compared to the interest rates offered for others. At this point, an introspection is required whether the Senior Citizen Savings Scheme is a better choice as compared to fixed deposits offered for senior citizens.
The following table presents a comparative analysis between Fixed Deposits and Senior Citizen Savings Scheme.
You can open an SCSS account either at an authorized 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.
You can also download the SCSS application form from the India Post website. You need to fill the form and submit it with the authorized post office along with the required documents and pay the deposit to open the account.
How to Fill the Post Office SCSS Application Form?
You can collect the SCSS application form either at the post office branch or on the official website of the India Post. The process of filling the application form is:
- Enter the post office branch name on the top left corner of the form.
- If you already have a savings account with the post office, enter the account number.
- Under the ‘To’ section, enter the branch address of the Post Office.
- Paste the account holder’s photograph.
- Now, write the account holder’s name in the first blank space and tick on ‘SCSS’ option among the other options.
- You don’t have to select any options provided under the ‘Additional Facilities Available’ section as they are valid only if you are applying to open a savings account.
- Next, select the account holder type, i.e. self, minor through guardian, or person of unsound mind through guardian.
- Select the account type, whether single, either or survivor, or all or survivor.
- Move to the field number 2 where you have to enter the deposit amount in figures and then in words. If you are presenting a cheque, write down the cheque number and date.
- Enter the personal details of account holder(s).
- Tick the cells where you have provided the requested document proofs at the end of the table.
- Tick the SCSS declaration and enter the details.
- Signatures of all the account holders must be added at the end of the page 1 of the form and in Page 2.
- Mention the nominee for the account and the relevant details of the nominee you have chosen. Add the signatures of all account holders to validate this information.
How to Open a SCSS Account with a Bank?
Below are the steps to open a SCSS account with an authorized bank:
Step 1: Go to the nearest authorized bank branch and collect the SCSS application form.
Step 2: Fill in the necessary information on the application form.
Step 3: Attach the required documents.
Step 4: Submit the application form, documents and the deposit money with the bank staff.
Step 5: The bank employees will process the application and open the SCSS account.
Which Banks Offer SCSS?
The following banks offer SCSS:
- Allahabad Bank
- Andhra bank
- Bank of Maharashtra
- Bank of Baroda
- Bank of India
- Corporation Bank
- Canara Bank
- Central Bank of India
- Dena Bank
- IDBI 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
- ICICI Bank
Along with these banks, the Post Office also offers SCSS.
Documents Required to Open SCSS Account
- Two passport-size photographs
- Identity proof, such as a PAN Card, Voter ID, Aadhar Card or passport.
- Proof of address, such as Aadhaar card or telephone bills.
- Proof of age, such as PAN card, Voter ID, birth certificate or senior citizen card.
All the documents must be self-attested.
Key Takeaways
- The Senior Citizens Savings Scheme (SCSS) was implemented to provide financial assistance specifically for the senior citizens section.
- Currently (For Q1 – FY 2025-26) , it offers an interest rate of 8.2% per annum, compounded quarterly. Interest is paid quarterly.
- Minimum deposit amount is Rs.1,000. Deposits can be made in the multiples of Rs.1,000. Up to Rs.30 lakhs deposit can be made.
- Tenure of deposit is usually 5 years, which can be extended to further 3 years.
- Person who has crossed 60 years, who has crossed 55 years and retired under superannuation, and retired defense personnel can open SCSS account.
- Account can be opened either individually or jointly along with spouse.
- Deduction under section 80C can be claimed for the amount deposited.
- It can be opened either online or offline, following simple steps.
- It can be opened with many banks, though it is specifically offered by post-office.
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