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.
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View Comments
I have deposited 15 lakhs in scss by filling form a in icici bank. Now 1 month is over and they have not sent me the fixed deposit receipt. What should I do.
can I take NSC for 1.5 Lakh in March 2019 and claim 80C Rebate for year 2018-19
Yes
Why TDS is 10% in case the interest received is Rs500000 (Total Rs50000 ) whereas tax payable is only Rs10000 and an individual liable to to pay 30%also pays 10% TDS
My father invested 5 lakh in scss jointly with my mummy this year Aug 2018.Now I also want to invest in her name only (NOT PAPPA) in SCSS. Now my Q is How much I could invest in her name Maximum and When? Can I invest in her 12.5L or 15L and should I have to wait for complete this finance year?APRIL-2019. Note- my mummy is Home-maker.
My father had invested 5L in scss in post with joint my mummy. (Date- 20-Aug-18).mom is house wife.
Now I want to invest more money in my mom's name. Now my Q is whether I can Invest full 15L or just 12.5L in my mom name? And when I can invest them.Should I had to wait for completing fiscal year?
My papa had joinly invested in scss with mummy 5L. Now I want to invest 2L in scss in mother’s name. Plz guide me. Max howmuch I can invest in my mom’s name?
Note- papa invested in scss july2018
When I can invest money ..
Can one after seven years of retirment open scss a/c.
Yes if you are more than 60 years of age
If one person invest in September in SCSS scheme then his interest will be be split in two financial years. Is this true?? Can i save tax by this?
Got idea from below link NDTV
[4 easy ways to avoid TDS on fixed https://www.ndtv.com/business/4-easy-ways-to-avoid-tds-on-fixed-deposits-326408
Example: if i invest in scss scheme 15 lakhs on 1-sep-18 then interest 124500/- would be split in two financial yrs.
2018-19 – 62250/-
2019-20- 62250/-
You'll get interest for half-year this year, but SCSS is 5 year product. Next year you'll get full year interest which will lead to TDS!
If husband invest 15 lakh in scss in name of his wife (age above 60) then interest arise will be clubbing in husband's income or not?
Yes it would be clubbed
If one person invest in September in SCSS scheme then his interest will be be split in two financial years. Is this true?? Can i save tax by this?
Example: if i invest in scss scheme on 1-sep-18 then interest would be split in two financial yrs.
Plz guide me.. .
For SCSS it does not matter. The interest is paid quarterly and the investment is for 5 years. even if NO TDS is deducted in first year of investment it would be deducted in following years. My advise do not worry much about TDS on SCSS as you might not be able to prevent it.
Sir don't want to prevent tds/tax but i want to divide it in two fiscals
If one person invest in September in SCSS scheme then his interest will be be split in two financial years. Is this true?? Can i save tax by this?
Got idea from below link NDTV
[4 easy ways to avoid TDS on fixed https://www.ndtv.com/business/4-easy-ways-to-avoid-tds-on-fixed-deposits-326408
Example: if i invest in scss scheme 15 lakhs on 1-sep-18 then interest 124500/- would be split in two financial yrs.
2018-19 – 62250/-
2019-20- 62250/-
In case of a joint account and death of primary holder before original maturity , can the spouse who is not a senior citizen at the time of death , continue the account and avail interest applicable to the scheme, can the spouse also extend the account post original maturity , for another 3 years , irrespective of age ? Branch opinion is that savings rate of interest is applicable on such account , post date of death to closure .How do I counter this since not explicit in the circular .