The Government of India recognised the importance of senior citizens’ source of income and introduced a savings scheme for them in 2004. The scheme enables senior citizens of India to save money for retirement and receive interest payments.
You can open an SCSS account individually or jointly with your spouse at an authorised bank or post office. The SCSS interest rate in 2022 in December is currently fixed at 7.6% per annum.
Features of Senior Citizens Savings Scheme
The key features of SCSS are as follows:
- The lock-in period is 5 years, after which you can extend the period for three more years. The request for extension can be made within one year of maturity. However, remember that you can choose to extend the tenure only once.
- You can only make a premature withdrawal at any point after opening the account, however, in case, the account holder decides to close the account before one year from the date of opening of the account, interest paid on the deposit in the account shall be recovered from the deposit and the balance shall be paid to the account holder.
- In case the PPF account is closed after the expiry of 1 year but prior to the expiry of 2 years from the date of opening of the PPF account, an amount equal to 1.5% of the deposit shall be reduced and the balance shall be paid to the account holder.
- In case the PPF account is closed beyond two years from the date of its opening, an amount equal to 1% of the deposit shall be deducted and the balance shall be paid to the account holder.
- Beneficiaries of the SCSS scheme will receive quarterly disbursals. Banks disburse interest payments every year on April 1, July 1, October 1 and January 1.
- SCSS is a source of regular income for senior citizens because of the quarterly interest payments.
- You can open this account with a minimum amount of Rs. 1,000. The maximum amount that you can deposit is Rs. 15 lakh.
Are several SCSS accounts possible?
Yes. A senior can create numerous SCSS accounts. However, at no point in time should the total deposits in all such accounts exceed Rs 15 lakh.
Rule for SCSS Withdrawal
Multiple withdrawals are not permitted from a SCSS account. While the principal (the deposit made at account opening) is paid on or after the passage of five years, or after the passage of eight years in the event of an extended account, the interest on SCSS investments is paid on a quarterly basis.
Calculating the SCSS Interest Rate: Examples
The interest generated on deposits in the account is paid on a quarterly basis in accordance with SCSS Rules. Such an amount does not accrue any more interest if the account holder does not claim the payable interest.
Owners of SCSS accounts may automatically credit payable interest to a savings account.
If the SCSS account earns 7.4% interest, a deposit of Rs 15 lakh will earn Rs 5,55,000 in interest after five years. In this instance, Rs 27,750 worth of interest will be deposited to your savings account each quarter. If you placed Rs. 10 lakh in the SCSS account, the total interest over five years and the quarterly interest amount Rs. 3.5 lakh and Rs. 18,500, respectively.
SCSS Maximum Age
A person must be 60 years of age or older to open a SCSS account. There are a few exceptions to this rule, though. Civilian employees must open a SCSS account within a month of receiving retirement benefits if they are over 55 but under 60.Former Defense Within one month of receiving retirement benefits, employees who are over 50 but under 60 can also open a SCSS account.
Joint Account Rule For SCSS
An elderly person may own a SCSS account on their own or jointly with their spouse. A single SCSS account as well as joint accounts between the couple are both permissible. The age restriction will only apply to the primary account holder in the case of a joint account, though. Only with joint accounts does the first account holder receive credit for the full deposit amount.
Benefit of SCSS Income Tax
Section 80C of the Income Tax allows deductions for deposits/investments made in SCSS accounts.
According to the official Post Office website, interest becomes taxable if it exceeds Rs 50,000 across all SCSS accounts in a given fiscal year. TDS is subtracted from the total interest paid in certain circumstances. However, if the account holder submits form 15G/15H and the accrued interest does not exceed the allowed maximum, no TDS is taken.
Benefits of Investing in Senior Citizen Saving Schemes
Here are some benefits offered by SCSS:
- Security
As this scheme is entirely GOI-backed, it is one of the safest and most reliable options for investments.
- Flexibility of tenure
Although SCSS has a lock-in period of 5 years, you can extend the period for 3 more years. Moreover, you can make premature withdrawals if the need arises.
- Hassle-free procedure
You can easily open an account under this scheme. All you need to do is visit the nearest branch of an authorised bank or post office.
- Nomination
This scheme provides the facility of nomination. So, while opening an account under this scheme, you can choose and provide the details of your nominee.
- Easy transferability
A Senior Citizens Savings Scheme account can be easily transferred across the country.
- Decent returns
As the rate of interest is higher than the interest offered by savings and fixed deposits, this scheme provides decent returns.
Calculation of Interest under the Senior Citizen Savings Scheme
Now, you can use an online SCSS scheme calculator to determine the following:
- Interest amount:
You can easily calculate the interest amount you will earn in the entire investment tenure.
- Maturity amount:
Now, calculation of the maturity amount is easy. You must insert the investment amount, interest rate, and tenure to receive the maturity amount.
- Interest to be received quarterly:
The online calculator will let you determine the interest you will earn in the entire investment tenure.
Benefits of an SCSS Calculator
The benefits of using an SCSS calculator are given below:
- Free to use
SCSS calculator is freely available online, and you can use it as many times as you require.
- Accuracy
An online SCSS calculator completely eliminates the chances of calculation errors. It provides an accurate result.
- Easy to use
It is easy and simple to use. You need to insert the investment amount. The tenure and interest rates are already fixed.
- Time-saving
Calculating the investment amount on the SCSS online calculator will save your valuable time.
- Easy to compare
You can compare different scenarios by inserting different investment amounts.
- Convenience
Lastly, you can use the online calculator at any time or place at your convenience.
Senior Citizens Savings Scheme (SCSS) Interest Rate:
Currently, the Government of India’s SCSS interest rate is fixed at 7.6% per annum, applicable for the first quarter (April – June) of the financial year 2022-2023.
SCSS offers one of the highest interest rates compared to the other fixed income savings schemes. The interest rate is reviewed every quarter. It is subject to periodic change by GOI.
Historical Trends of SCSS Interest Rate
The table below displays the historical trends of SCSS interest rate:
| Timeline | SCSS Rate of Interest (Percentage per Annum) |
| October to December (Q3 of FY 2022-2023) | 7.6% |
| July to September (Q2 of FY 2022-2023) | 7.4% |
| April to June (Q1 of FY 2022-2023) | 7.4% |
| January to March (Q4 of FY 2021-2022) | 7.4% |
| October to December (Q3 of FY 2021-2022) | 7.4% |
| July to September (Q2 of FY 2021-2022) | 7.4% |
| April to June (Q1 of FY 2021-2022) | 7.4% |
| January to March (Q4 of FY 2020-2021) | 7.4% |
| October to December (Q3 of FY 2020-2021) | 7.4% |
| July to September (Q2 of FY 2020-2021) | 7.4% |
| April to June (Q1 of FY 2020-2021) | 7.4% |
| January to March (Q4 of FY 2019-2020) | 8.6% |
| October to December (Q3 of FY 2019-2020) | 8.6% |
| July to September (Q2 of FY 2019-2020) | 8.6% |
| April to June (Q1 of FY 2019-2020) | 8.7% |
| January to March (Q4 of FY 2018-2019) | 8.7% |
| October to December (Q3 of FY 2018-2019) | 8.7% |
| July to September (Q2 of FY 2018-2019) | 8.3% |
| April to June (Q1 of FY 2018-2019) | 8.3% |
| January to March (Q4 of FY 2017-2018) | 8.3% |
| October to December (Q3 of FY 2017-2018) | 8.3% |
| July to September (Q2 of FY 2017-2018) | 8.3% |
| April to June (Q1 of FY 2017-2018) | 8.4% |
Who Should Invest in a Senior Citizen Savings Scheme?
Any senior citizen, who is a resident of India and wishes to get higher returns than bank savings deposits or FDs, can open an account under SCSS.
If a senior citizen wishes to avail of an investment option which would provide long-term benefits, they can choose Senior Citizens Savings Scheme.
An additional advantage of Senior Citizen Savings Scheme accounts is the facility of joint ownership. However, please note that joint ownership provisions apply only to spouses.
List of Banks Offering SCSS Accounts
One can open an SCSS account in the following banks:
- State Bank of India
- Bank of Baroda
- Punjab National Bank
- Union Bank of India
- IDBI Bank
- Canara Bank
- Central Bank of India
- Indian Bank
- Bank of Maharashtra
- UCO Bank
- ICICI Bank Ltd
Apart from the list of banks mentioned above, you can also open a Senior Citizens Savings Scheme accounts at your nearest post office.
Final Word
To sum up, Senior Citizens Savings Scheme interest rate is one of the highest interest paying schemes in the country among low-risk investment options. Senior citizens in India can consider this GOI-backed secure investment option. Opening an SCSS account is easy and hassle-free. One can easily open it at any RBI-authorised bank or post office. This scheme comes with tax benefits as well.
FAQs on Senior Citizen Savings Scheme Interest Rate
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What are the documents required to open an SCSS account?
Given below is a list of documents required to open an SCSS account:
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- PAN card
- Passport
- Voter ID
- Senior Citizen Card/birth certificate
- Passport size photographs
- Telephone and electricity bill
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What will happen if the SCSS primary account holder dies?
If the SCSS primary account holder dies before the amount matures, the bank will close the account, and the legal nominee will receive the proceeds. The nominee has to submit an application in the prescribed format along with the death certificate of the primary account holder.
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Is there any upper age limit for opening an SCSS account?
There is no upper age limit for opening an SCSS account. However, one can open a Senior Citizens Saving Scheme account only after attaining the age of 60.
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Is there any tax benefit available on investments in SCSS?
As per provisions of Section 80C of Income Tax Act, a senior citizen can claim tax deduction for investments up to Rs. 1,50,000 in Senior Citizens Savings Scheme.
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