The Senior Citizen Savings Scheme is a government savings scheme launched for the senior citizens of India aged 60 or above. This scheme is one of the most preferable options for earning a steady income post-retirement. You can apply for the scheme at any bank or post office. It has a maturity period of 5 years which can be extended to 8 years. The current interest rate for this scheme is 7.4% p.a.
It’s been proposed to exempt senior citizens from filing ITR returns provided the pension and its subsequent interest income are the only income source. However, Section 194P, that has been implemented recently, has enforced banks to deduct tax on senior citizens aged 75 years and above provided they have a pension and interest income from the bank.
SCSS or Senior Citizen Savings Scheme is a Government-backed initiative that aims to monetarily benefit the senior citizens of India. Individuals ages 60 years and above can invest in this scheme to get regular monthly income and tax benefits post retirement. You can invest in a lump sum in this scheme and enjoy the interest on the invested amount post-maturity.
If you are a senior citizen, you would need to open an SCSS account to avail of scheme benefits. You can open this account either with a bank or post office. Senior citizens can invest individually or jointly in a lump sum in the scheme to enjoy regular income after retirement. You can claim tax benefits too on your investment in the Senior Citizen Savings Scheme.
You could get an SCSS form by visiting your nearest bank or post office. Thanks to modern banking, you could do the same offline too. Just go to your bank’s official website, search for “Senior Citizen Savings Scheme” and download the SCSS form online.
The following are the prominent features of SCSS:
The following table will help you understand the basic differences between SCSS and fixed deposits. This will help you choose the option that is best suited for you.
|Attributes||Senior Citizen Savings Scheme||Fixed Deposit|
|Maturity period||5 years||Usually ranges from 7 days to 10 years|
|Interest rate||7.4%||Usually ranges from 6%- 7.5%|
|Premature withdrawal||Available any time after opening an account, but a penalty is applicable||Not available|
|Tax benefits (on investment)||Available||Available|
|Tax benefits (on return )||Taxable||Taxable|
However, FD interest rates have fallen over the years. So, keep other external factors in mind before choosing between the two, like premature withdrawal facility, interest rates, etc.,. The best piece of advice would be to have both the accounts if possible. Both SCSS and FDs offer guaranteed returns with minimal risk.
If you are thinking about investing in SCSS, the following list of benefits will help you know why this scheme could be a suitable option for you.
To have a better understanding of the SCSS interest rate, here is a brief rundown of the interest rates over the past few years.
|Time Period (financial year)||Rate of Interest|
|Jan- Mar (FY 2021-22)||7.4|
|Oct-Dec (FY 2021-22)||7.4|
|Jul-Sep (FY 2021-22)||7.4|
|April-June (FY 2021-22)||7.4|
|Jan-March (FY 2020-21)||7.4|
|Oct-Dec (FY 2020-21)||7.4|
|July-Sep (FY 2020-21)||7.4|
|April-June (FY 2020-21)||7.4|
|Jan-March (FY 2019-20)||8.6|
|Oct-Dec (FY 2019-20)||8.6|
|July-Sep (FY 2019-20)||8.6|
|Apr-Jun (FY 2019-20)||8.7|
|Jan-March (FY 2018-19)||8.7|
|Oct-Dec (FY 2018-19)||8.7|
|July-Sep (FY 2018-19)||8.3|
|Apr-June (FY 2018-19)||8.3|
|Jan-March (FY 2017-18)||8.3|
|Oct-Dec (FY 2017-18)||8.3|
|July-Sep (FY 2017-18)||8.3|
|Apr-Jun (FY 2017-18)||8.4|
As this is a scheme only for senior citizens, SCSS has the following eligibility criteria:
You will need the following documents while applying for the Senior Citizen Savings Scheme.
You can open an SCSS account in any post office or bank. The process to open an account is given below:
Step 1: Go to the closest post office or bank branch.
Step 2: Submit ‘Form A’ and the KYC documents.
Step 3: If the deposit amount is under Rs. 1 lakh, then you can pay in cash. Otherwise, the deposit amount should be paid by cheque.
The following banks offer SCSS:
Also Read: Health Insurance Plans For Senior Citizens: How To Claim, Best Plans And Benefits
Senior Citizens Savings Scheme offers guaranteed returns and a steady income for the elderly after retirement. Therefore, to have financial stability in future, one can consider investing in this scheme.
Ans: You have to link your SCSS account with your post office savings or bank account before March 31 2022, as announced by the government. This has to be done because the interest on your SCSS account will be credited directly to your bank or PO savings account.
Ans: There is no fixed date for the interest rate to change on SCSS. However, this decision is taken by the Monetary Policy Committee via a meeting which is held 4 times a year at an interval of 3 months. The first meeting is generally held in the first quarter of every financial year.
Ans: You can open an SCSS account with SBI in a few simple steps. However, the very condition for having more than one SCSS account is the total deposit amount of all the accounts taken together should not exceed Rs. 15 lakh.
Ans: In the event of the sudden demise of the account holder, the available amount at the time of the unfortunate event is transferred to the legal heir or nominee. Therefore, the nominee or the legal heir can apply for transfer along with the account holder’s death certificate.
Ans: Individuals can only open a joint account with their spouse under SCSS. However, there is no age limit for the second account holder.
Ans: The maturity period of SCSS is five years. Post maturity, individuals can apply for an extension of another three years but only within the year of maturity.
Ans: As of now, there are no such options. You have to visit a bank or post office, submit the form and issue the cheque to open an SCSS account. However, you could choose to download the form online.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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