Understanding the Senior Citizen Savings Scheme (SCSS) in India

The Senior Citizen Savings Scheme (SCSS) is a government-backed initiative aimed at providing financial security and a consistent income stream to senior citizens after their retirement. This scheme allows Indian residents who are 60 years or older to open an account, which can be held individually or jointly with a spouse.

Eligibility for the Senior Citizen Savings Scheme

The following criteria define who can open an SCSS account at a post office or an authorized bank:

Individuals who have reached 60 years of age or more.
Retired civilian employees between 55 and 60 years old, provided they open the account within one month of receiving their retirement benefits.
Retired defense personnel aged 50 to 60 years, if the account is opened within one month of receiving retirement benefits.
Accounts can be established solely in an individual's name or jointly with a spouse.
Non-Resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not permitted to open an SCSS account.
As of March 31, 2023, possessing a Permanent Account Number (PAN) and Aadhaar number is mandatory for opening an SCSS account.

Key Characteristics of SCSS

The Senior Citizen Savings Scheme offers several distinctive features:

Secure Investment

SCSS is a government-backed program, guaranteeing the safety of the principal amount and assured returns upon maturity. While cash deposits are permissible for amounts up to INR 1 lakh, transactions exceeding this limit must be made through banking channels.

Multiple and Joint Accounts

Individuals are allowed to maintain more than one SCSS account. However, joint accounts are exclusively permitted with a spouse, and the entirety of the deposit is attributed to the primary account holder.

Nominations

Account holders have the option to appoint nominees at the time of account opening or at a later stage.

Deposit Rules

Deposits up to INR 1,000,000 can be made in cash, but amounts exceeding this require bank payments.
The minimum deposit amount is INR 1,000, and the maximum is INR 30 lakh, with all deposits accepted in multiples of INR 1,000.
The deposit amount cannot exceed the total retirement benefits received. This sum must be deposited in a single installment within one month of receiving these benefits.
Retirement benefits encompass various forms of payments, including provident fund dues, gratuity, commuted pension value, leave encashment, savings from Group Savings Linked Insurance Schemes, retirement-cum-withdrawal benefits under the Employees' Family Pension Scheme, and ex-gratia payments from voluntary or special voluntary retirement schemes.
If a deposit surpasses the maximum permissible limit, the excess amount will be promptly refunded to the account holder.

Account Transferability

An SCSS account can be transferred from a post office to a bank or vice versa, and transfers are facilitated across India.

Tax Implications

Contributions made to the SCSS scheme are eligible for deductions under Section 80C of the Income Tax Act.
If the annual interest accrued across all SCSS accounts exceeds INR 1 lakh, Tax Deducted at Source (TDS) will be applied. For account holders under 60 years, TDS is applicable if the total interest surpasses INR 50,000 per annum.

Early Closure and Withdrawals

Account holders can request to close their SCSS account and withdraw the funds at any time by submitting Form 2. Penalties for premature withdrawals are structured as follows:

Period of Closure	Penalty Amount
Before one year	The interest already paid will be recovered from the principal.
Between one to two years	A penalty of 1.5% of the principal amount will be charged.
After two years	A penalty of 1% of the principal amount will be charged.

Please note that premature withdrawal is permitted only once. As of August 29, 2024, withdrawals from SCSS accounts will be exempt from tax.

Maturity

The standard maturity period for an SCSS account is five years. This period can be extended by an additional three years, provided the application for extension is submitted within one year from the original maturity date.

Senior Citizen Savings Scheme Interest Rate

Particulars	Details
Interest Rate	8.2% per annum (as declared for the first three quarters of the fiscal year 2025-26).
Calculation	Interest rates are subject to quarterly revisions. Interest is compounded and paid quarterly.
Payment Method	Interest payments are credited on the first day of April, July, October, and January.

Banks Offering SCSS

The following banks are authorized to offer the Senior Citizen Savings Scheme, in addition to the Post Office:

Allahabad Bank
Canara Bank
Oriental Bank of Commerce
Andhra Bank
Central Bank of India
Punjab National Bank
Bank of Maharashtra
Dena Bank
State Bank of Bikaner & Jaipur
Bank of Baroda
IDBI Bank
State Bank of Hyderabad
Bank of India
Indian Bank
State Bank of India
Corporation Bank
Indian Overseas Bank
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
Vijaya Bank
ICICI Bank

Required Documents for Opening an SCSS Account

To open an SCSS account, you can obtain the application form from the India Post website or any post office branch. The following documents are necessary:

Two recent passport-size photographs.
Proof of identity, such as a PAN card, Voter ID, Aadhaar card, or passport.
Proof of address, like an Aadhaar card or telephone bills.
Proof of age, including a PAN card, Voter ID, birth certificate, or senior citizen card.

All submitted documents must be self-attested.