Senior Citizens’ Savings Scheme (SCSS) is one of the best fixed deposit schemes for Retired Senior Citizens as its safe (backed by Government of India), has assured quarterly payments, gives tax benefit and easy to handle. This post provides details of rules and regulations for SCSS.
As the name states, anyone with age of 60 years or more can open Senior Citizens’ Savings Scheme account.
This minimum age is relaxed to 55 years for people opting for voluntary retirement (VRS). However person opting for VRS should open the account within one month of receiving the retirement benefits. Also the amount deposited cannot exceed the retirement benefits.
Retired personnel of Defense Services are eligible to subscribe irrespective of the above age limits
Non-Resident Indians (NRI), Persons of Indian Origin (PIO) and Hindu Undivided Families (HUF) are not eligible to open SCSS account.
Also Read: Best Interest Rate on Fixed Deposits for Senior Citizens
You will need to approach any of the authorized bank or post office branch with following documents:
The above documents should be self attested
It’s good idea to carry the original document for verification by bank officials.
On submitting the filled up SCSS account opening form along with required documents, bank would open the account and provide with the Pass Book and acknowledgement of the amount deposited for the same.
The Senior Citizens’ Savings Scheme Account can be opened at any of the Post Offices, 20 PSU banks and ICICI Bank. Below is the list of Banks:
Allahabad Bank | Corporation Bank | Syndicate Bank |
Andhra bank | Dena Bank | UCO Bank |
Bank of Baroda | IDBI Bank | Union Bank of India |
Bank of India | Indian Bank | United Bank of India |
Bank of Maharashtra | Indian Overseas Bank | Vijaya Bank |
Canara Bank | Punjab National Bank | ICICI Bank Ltd |
Central Bank of India | State Bank of India |
Also Read: Pensioner Claim Tax Benefit for Rent Paid u/s 80GG
The SCSS account can be transferred from one branch to the other by filling up Form G. For deposit amount of more than Rs 1 lakh a transfer fee of Rs 5 per lakh is charged for the first transfer. For subsequent transfers the transfer fee is Rs 10 per lakh.
There is no transfer fee for deposit amount of less than Rs 1 lakh.
A person can invest maximum of Rs 15 lakhs in Senior Citizens’ Savings Scheme. You can open multiple accounts and joint account with your spouse only but the total investment across all accounts cannot exceed Rs 15 lakhs.
Spouses can open separate accounts with Rs 15 Lakh limit for each of them. So a couple can invest maximum of Rs 30 Lakhs.
The minimum investment is Rs 1,000 and can be increased in multiples of Rs 1,000 thereof.
Amount below Rs 1 Lakh can be deposited in cash while any amount above that has necessarily be deposited using cheque.
You can open joint account for SCSS with the following conditions:
The interest rates offered on SCSS is 1% above 5 year government bond yields and is reset at the start of every financial year (April 1). From April 1, 2016 the interest rate on SCSS would be reset every quarter i.e. in April, July, October and January.
For FY 2019-20 (April to June 2019) the interest rate is 8.70%. Check latest and historical interest rates here
Once invested the interest rate remains unchanged over the tenure of the deposit.
Also Read: Best Tax Saving Investments u/s 80C
The interest earned is paid on the last working day of every quarter – March 31, June 30, September 30, December 31. The payout date remains constant irrespective of date of deposit.
The payment can be made directly to depositor’s account through ECS or post dated cheques.
Also Read: Where to Park Money for Very Short Term?
Senior Citizens’ Savings Scheme matures at the end of five years from the date of deposit. There are 3 options on maturity:
1. Withdraw the amount by filling up Form E and submit the same along with Passbook.
2. The scheme can be extended by 3 years after maturity by submitting required Form B within 1 year of maturity. The extension is considered from the date of maturity and not from the date of submitting form.
3. In case the amount is neither withdrawn nor requested for extension with in 1 year of maturity, the account shall be treated as matured. The money can be withdrawn anytime after that. You would be paid interest applicable to Post office Savings Accounts (currently at 4%) from the date of maturity to the month preceding the withdrawal.
Also Read: 21 Hidden Charges in Saving Bank Account
In case of emergency, an investor can foreclose the account after one year of opening it. The penalty for doing so is as follows:
Also no loan is available against SCSS deposit.
Also Read: 13 Investments to Generate Regular Monthly Income
Nomination can be made at the time of opening of account any time thereafter by filling Form C. Nomination is also possible for Joint account. But in case of joint account, the money would be passed to the survivor of the joint holder. Nomination would come in effect only on death of both the joint holders.
The investment up to Rs 1.5 lakhs in Senior Citizens’ Savings Scheme is eligible for tax deduction u/s 80C.
However the interest earned is fully taxable. The interest income is added to the income of the investor and taxed according to the marginal tax rate.
TDS (tax deduction at source) is deducted @ 10% of interest paid in case the annual interest is more than Rs 50,000 in a financial year. However if your total income for the year is below exempted limit of income tax, you can submit form 15H (for more than 60 years) or 15G (for less than 60 years) to the concerned bank/post office to avoid TDS hassles.
You can download the following Senior Citizens’ Savings Scheme forms from Ministry of Finance Website:
Download: Excel based Income Tax Calculator for FY 2019-20 (AY 2020-21)
Senior Citizens’ Savings Scheme is a good scheme for retired people looking for regular timely payouts. However this might not suit people in higher tax bracket as the interest income is fully taxable. They might want to evaluate systematic withdrawal plan in debt fund or tax free bonds.
Have you invested in SCSS for yourself or for your parents?
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View Comments
interest paid /credited works out to 8.4% only and not 9.3%.can anybody explain.or whom should i complain. post office staff say that interest is system calculated pl enlighten
Have you considered TDS which is 10% of the interest paid? You should submit Form 15H in case you qualify for the same to avoid TDS.
ON 08.10.2015 I HAVE WENT TO SBI AND UNITED BANK OF INDIA TO GET THE INFO ABOUT SENIOR CITIZEN SCHEME AND INTEREST RATE, I ASKED THEM TO SHARE THE ROI OF THE MIS SCHEME FOR SENIOR CITIZEN AND BOTH OF THE BRANCH INFORMED ME ABOUT THE FLEXIBLE TERM DEPOSIT ROI i.e. 7.50 FOR UBI & 7.75 FOR SBI FOR SENIOR CITIZEN, THEY HAVE NEVER INFORMED ABOUT THE SCSS. THATS WHY I AM GETTING CONFUSED.
PLEASE GUIDE ME.
Banks are known to miss-sell. They are miss-selling you their recurring/fixed deposit schemes while you want to invest in Senior Citizen Saving Scheme. You can download the SCSS Forms here, fill them and then submit it to the bank.
Is the interest earned on the deposits on the name of spouse is added to the income of the person under SCSS or treated as separate income of the spouse for income tax calculation
Clubbing rule is applicable irrespective of type of investment you make. So even in case of SCSS if it's your money which has been invested in wife's name the income would be clubbed with your income. However, any further gains made on the interest income of your wife would not be clubbed. You can read more about - How your wife can help you save taxes?
Does further Extension of SCSS for three years eligible for 80C benefits ?
I don't think extension of SCSS would be eligible for tax benefit u/s 80C. This is because the terms of deposit is different in fresh deposit vs extension. Extension is for 3 years while in case of fresh deposit it's for 5 years. Also the penalty clause for pre mature withdrawal vs extension is different. So logically it should not be eligible for 80C tax benefit.