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Senior Citizens Savings Scheme (SCSS) Interest Rate

senior citizen savings scheme

 

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: 

 

 

 

 

 

 

 

 

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: 

 

 

As this scheme is entirely GOI-backed, it is one of the safest and most reliable options for investments. 

 

 

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.  

 

 

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. 

 

 

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. 

 

 

A Senior Citizens Savings Scheme account can be easily transferred across the country. 

 

 

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: 

 

 

You can easily calculate the interest amount you will earn in the entire investment tenure.

 

 

Now, calculation of the maturity amount is easy. You must insert the investment amount, interest rate, and tenure to receive the maturity amount. 

 

 

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: 

 

 

SCSS calculator is freely available online, and you can use it as many times as you require.

 

 

An online SCSS calculator completely eliminates the chances of calculation errors. It provides an accurate result. 

 

 

It is easy and simple to use. You need to insert the investment amount. The tenure and interest rates are already fixed. 

 

 

Calculating the investment amount on the SCSS online calculator will save your valuable time. 

 

 

You can compare different scenarios by inserting different investment amounts. 

 

 

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: 

 

 

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

 

Given below is a list of documents required to open an SCSS account:

 

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. 

 

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. 

 

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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