Investing in Senior Citizens Saving Scheme

Senior Citizen Savings Scheme (SCSS) is a preferred fixed income investment option for people above the age of 60 years. The primary objective of this scheme is to help senior citizens ensure a regular flow of income post retirement. Since SCSS is a government-backed investment scheme, it gives guaranteed returns on a quarterly basis. One can avail SCSS through certified banks and post offices in India.

Senior Citizen Savings Scheme (SCSS) Highlights

> Interest Rate 7.40% per annum (Q2 FY 2021-22)
Tenure 5 years (with an option to extend it for 3 more years)
Minimum Investment Amount Rs. 1,000
Maximum Investment Amount Rs. 15 Lakh or the amount received on retirement, whichever is lower


Safe and reliable investment
High returns as compared to FD or Savings Account
Tax benefit up to Rs. 1.5 Lakh

Premature Withdrawal Penalty

1.5% of the deposited amount if withdrawn before the completion of 2 years
1% of the amount on withdrawing after the completion of 2 years

SCSS Interest Rate

Senior Citizen Savings Scheme (SCSS) interest rates for the second quarter (July-September) of FY 2021-22 is 7.4% p.a. This is one of the highest interest rates offered by a fixed income small savings scheme.
SCSS interest rate is reviewed quarterly and is subject to periodic change. Interest is also calculated and credited quarterly.

SCSS Eligibility Criteria

If you fall in the following groups, you are eligible to invest in SCSS:
People above the age of 60 years
Retirees in the age bracket of 55-60 years who have opted for Voluntary Retirement Scheme (VRS) or Superannuation* Retired defence personnel with a minimum age of 60 years
*Investment must be made within a month of availing the retirement benefits.
Note: HUFs and NRIs are not eligible to invest in Senior Citizen Savings Scheme

Benefits of Investing in Senior Citizen Savings Scheme

Given below are the top reasons why SCSS is a preferred investment option among senior citizens:
Guaranteed Returns: Since SCSS is a government-backed small savings scheme, it is one of the safest and most reliable investment options for senior citizens.
High Interest Rate: Offering interest at the rate of 7.4% per annum, SCSS is among the most beneficial investment options, especially compared to the rather traditional ways of savings such as FD and Savings Account.
Tax Benefit- Under section 80C of the Income Tax Act, SCSS is eligible for a tax deduction of up to Rs. 1.5 Lakh per annum.
Simple Investment Process: The process of investing in SCSS is quite simple. You can open an SCSS at any authorized bank or any post office in India.
Quarterly Interest Payouts: Under SCSS, the interest amount is paid to the accountholders quarterly which ensured period payouts adding to your investment. Interest will be credited on the first day of April, July, October, and January every financial year.

Senior Citizen Savings Scheme (SCSS) Deposit Limits

Eligible investors can make a lump sum deposit in Senior Citizen Savings Scheme (SCSS).

Minimum Deposit– Rs. 1,000 (and in multiples thereof) Maximum Deposit– Rs. 15 Lakh or the amount received on retirement, whichever is lower While deposits in SCSS accounts can be made in cash, it is allowed only for amounts less than Rs. 1 Lakh. For deposits exceeding Rs. 1 lakh, using a cheque/demand draft for is mandatory.

SCSS Maturity Period

A Senior Citizen Savings Scheme matures after 5 years calculated from the date of account opening. However, the account holder does have the option of extending the account for an additional 3 years after it has matured. This extension option is currently available just once and the extension request has to be made within 1 year of maturity of the SCSS account.