Senior Citizen Savings Scheme (SCSS) was launched in 2004 by the government of India in order to provide a guaranteed return to the senior citizens by means of safe investment. This scheme offers risk-free investment to the senior citizen.
HUF & NRI are not eligible to open SCSS account
Following are the documents required to open SCSS account:
One can open Sr Citizen Saving Scheme at any Post Office across India. There are also many national and private banks that facilities the scheme.
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In SCSS account, a minimum investment amount should be of INR 1,000 and a maximum could be INR 15 lacs. The scheme allows only one deposit in the account and this shall be in multiples of INR 1,000. The amount invested cannot exceed the money that has been received on retirement. Thus, an individual can invest either INR 15 lacs or the amount received as a retirement benefit (whichever is lower).
Even though the deposit is limited to only one time, a person can open multiple SCSS accounts, which is not in the case of PPF (wherein a person can only open one PPF account).
The scheme offers a quarterly interest payment while minimizing your Taxes. The rate of interest is reviewed quarterly by the Ministry of Finance and subject to periodic change.
The SCSS interest rate for April to June 2020 has been set at 7.4%. The quarterly interest of SCSS is payable on 1st working day of April, July, October and January.
The following are the historic interest rates of the SCSS account-
|Time Period||Interest Rate (% annually)|
|April to June (Q1 FY 2020-21)||7.4|
|Jan to March (Q4 FY 2019-20)||8.6|
|Oct to Dec 2019 (Q3 FY 2019-20)||8.6|
|Jul to Sep 2019 (Q2 FY 2019-20)||8.6|
|Apr to Jun 2019 (Q1 FY 2019-20)||8.7|
|Jan to March 2019 (Q4 FY 2018-19)||8.7|
|Oct to Dec 2018 (Q3 FY 2018-19)||8.7|
|Jul to Sep 2018 (Q2 FY 2018-19)||8.3|
|Apr to Jun 2018 (Q1 FY 2018-19)||8.3|
|Jan to March 2018 (Q4 FY 2017-18)||8.3|
|Oct to Dec 2017 (Q3 FY 2017-18)||8.3|
|Jul to Sep 2017 (Q2 FY 2017-18)||8.3|
|Apr to Jun 2017 (Q1 FY 2017-18)||8.4|
Data Source: National Savings Institute
The tenure of SCSS is of 5 years. However, there is an option to extend the scheme further for three years. In order to extend the scheme, one has to submit the dully filled Form B (after the completion of 5 years), which is regarding the extension of the scheme. Such extension accounts can also be closed after a year without paying any penalty.
The premature withdrawals are allowed, but only after one year of account opening. On the account closure, before the end of two years, 1.5 percent of the deposit shall be deducted as pre-mature withdrawal charges. And, on the closure of the account after 2 years an amount equal to 1 percent of the deposit shall be deducted as charges.
No charged or penalty is levied for premature closure of the account in the event of death.
The interest earned on the deposit is fully taxable and tax is deducted at source (TDS) as per applicable income tax Rules. Although, is the income is not taxable, an individual has to provide 15H or 15G form so that no tax is deducted at source.
Apart from the post offices, the SCSS account is also offered at selected Public and Private sector banks mentioned below:
|Authorized Banks for SCSS Account||Authorized Banks for SCSS Account|
|Andhra Bank||Bank of Maharashtra|
|Bank of Baroda||Bank of India|
|Corporation Bank||Canara Bank|
|Central Bank of India||Dena Bank|
|IDBI Bank||Indian Bank|
|Indian Overseas Bank||Punjab National Bank|
|State Bank of India||State Bank of Mysore|
|State Bank of Bikaner and Jaipur||State Bank of Patiala|
|State Bank of Travancore||State Bank of Hyderabad|
|Syndicate Bank||UCO Bank|
|Union Bank of India||Vijaya Bank|
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