How to Invest in Senior Citizens Savings Scheme in 2023? – Interest Rate, Advantages and Disadvantages
Senior Citizens Savings Scheme (SCSS) is a popular investment option in India designed specifically for senior citizens looking for a safe and secure investment option with attractive returns. This scheme is backed by the government, making it a low-risk investment option for those seeking a secure investment. In this article, we’ll take a closer look at Senior Citizens Savings Scheme (SCSS), including its features, benefits, advantages, disadvantages and how it works. We’ll also provide insights into the latest interest rates and returns offered by SCSS, as well as the tax benefits associated with this investment scheme.

Senior Citizens Savings Scheme (SCSS) Key Details?
Here are the key details of the Senior Citizens Savings Scheme (SCSS):
Feature | Details |
---|---|
Investment type | Fixed income investment scheme |
Eligibility | Only for senior citizens aged 60 years and above |
Investment amount | Minimum investment of Rs. 1,000 |
Investment tenure | 5 years, extendable for another 3 years |
Interest rate | Currently 8.2% p.a. (quarterly payouts) |
Interest rate revised on | 1st April 2023 |
Interest payment | Quarterly |
Tax benefits | Premature withdrawals are allowed with penalty |
Maturity amount | Investment amount + accumulated interest |
Liquidity | Premature withdrawals are allowed with a penalty |
Risk | Government-backed, low-risk investment |
Consider reading: Top 10 Best Investment Options in India
Features of the Senior Citizens Savings Scheme (SCSS)
The Senior Citizens Savings Scheme (SCSS) in India is a savings instrument specifically designed for individuals who are aged 60 years or above. Some of the key features of the SCSS are:
- The SCSS is offered by the Indian government and can be opened at designated post offices and selected public sector banks in India.
- The minimum deposit required to open an SCSS account is INR 1,000, and the maximum deposit is INR 30 lakhs per annum( this is recently revised in Budget 2023)
- The SCSS offers a fixed rate of interest, which is currently set at 8.2% per annum. The interest is paid quarterly.
- The SCSS has a maturity period of 5 years, which can be extended by another 3 years once the scheme matures.
- Deposits made under the SCSS are eligible for tax benefits under Section 80C of the Income Tax Act.
- Withdrawals from the SCSS are allowed after completion one year from the date of opening the account. However, premature withdrawal is permitted in certain circumstances, such as the death of the account holder or in the case of the account holder becoming medically unfit.
- The nomination facility is available under the SCSS.
- The SCSS is a safe and secure investment option, as it is backed by the government of India.
Taxation on Senior Citizens Savings Scheme (SCSS)
Interest earned from the Senior Citizens Savings Scheme (SCSS) in India is fully taxable. However, the deposits made under the SCSS are eligible for tax benefits under Section 80C of the Income Tax Act. This means that the depositor can claim a tax deduction of up to INR 1.5 lakh on the deposits made under the SCSS, provided they meet the other conditions specified in the act.
In addition to the tax benefits under Section 80C, senior citizens (individuals who are 60 years of age or above) are eligible for additional tax exemptions under Section 80TTB of the Income Tax Act. Under this section, senior citizens can claim a tax deduction of up to INR 50,000 on the interest earned from the SCSS, as well as from other sources such as fixed deposits, savings accounts, and so on.
What is the Eligibility For SCSS Scheme?
An individual must be a citizen of India. Non-residential Indians (NRIs) or a person of Indian origin (PIOs) are not eligible to avail of this feature. Also, Hindu Undivided Families (HUFs) do not qualify for this scheme.
- Any resident of India aged 60 years or above is eligible for this scheme. There are a few exceptions to the age bar.
- Retirees in the age group of 55-60 years who have opted for the Voluntary Retirement Scheme (VRS) or Superannuation are eligible t avail of the scheme if they apply for the same within one month of gaining their retirement perks.
- Retired defence personnel can avail of this scheme irrespective of their age, provided they fulfil all other conditions. This scheme can be availed with a minimum deposit amount of Rs. 1000.
An individual can invest a maximum amount of Rs 15 lakhs, individually or jointly in an SCSS account (in multiples of Rs 1,000). The amount invested in the scheme cannot exceed the money that has been received on retirement.
Hence, the individual can invest either Rs 15 lakhs or the amount received as a retirement benefit, whichever is lower. The account can be opened by cash for an amount below Rs 1 lakh and by cheque for an amount exceeding Rs 1 lakh.
What is the Interest Rate for SCSS?
The current interest rate for SCSS (Senior Citizens Savings Scheme) is 8.2% as of April 2023.
This is the highest interest rate among the various small savings schemes in India. SCSS is available through Public / Private sector banks and India Post Offices.
Being a government-backed savings instrument, the terms and conditions applicable to the SCSS are the same, regardless of the bank/ post office, you invest through.
How to Invest in the Senior Citizens Savings Scheme?
You can visit any of the below banks to open your account, alternatively, you can open the account at Post Office.
1. Allahabad Bank 2. Andhra bank
3. Bank of Maharashtra
4. Bank of Baroda
5. Bank of India
6. Corporation Bank
7. Canara Bank
8. Central Bank of India
9. Dena Bank
10. IDBI Bank
11. Indian Bank
12. Indian Overseas Bank
13. Punjab National Bank
14. State Bank of India
15. Syndicate Bank
16. UCO Bank
17. Union Bank of India
18. Vijaya Bank
19. ICICI Bank
You can check about post office Senior Citizens Savings Scheme details here.
What Documents are Required for the Senior Citizens Savings Scheme (SCSS)?
To invest in the Senior Citizens Savings Scheme you will need below documents:
- Form A has to be filled out for opening an SCSS account.
- Identity proof like PAN card, Passport to be presented.
- Address proof such as a Telephone bill, and Aadhar card is mandatory.
- A document for proof of age is required. This could be in the form of a Passport, Senior Citizen Card, Birth certificate issued by the Corporation or Registrar of Births and Deaths, Voter ID card, PAN card, etc.
- 2 Passport size photographs.
What are Premature Closure Charges for the Senior Citizens Savings Scheme (SCSS)?
In case of premature closure of the Senior Citizens Savings Scheme after one year but before the expiry of two years from the date of opening of the account, an amount equal to one and a half per cent of the deposit will be deducted.
In case of premature closure after two years from the date of opening of the account, an amount equal to one per cent of the deposit will be deducted.
The depositor availing the facility of extension of account may be permitted to withdraw the deposit & close the account at any time after the expiry of one year from the date of extension of the account without any deduction.
What are the Benefits of the Senior Citizens Savings Scheme (SCSS)?
Here are some benefits of the SCSS:
- Guaranteed returns: The SCSS offers a guaranteed rate of interest, which is currently set at 7.4% per annum. This can provide a stable and secure source of income for senior citizens during their retirement years.
- Long-term investment option: The SCSS has a maximum policy term of 5 years, which can be extended for a further 3 years. This can be a good option for those looking for a long-term investment to support them during their retirement years.
- Tax benefits: The premium paid for the SCSS is eligible for tax deductions under Section 80C of the Income Tax Act, which can help reduce the overall cost of the investment.
- Flexibility: The SCSS offers flexibility in terms of the investment amount and the policy term, allowing investors to choose the option that best meets their needs.
- Security: The SCSS is backed by the Government of India, which provides a level of security and stability for investment.
What are the Disadvantages of the Senior Citizens Savings Scheme (SCSS)?
While the SCSS can be a convenient and secure investment option, it also has some disadvantages to consider:
- Low returns: The SCSS offers a fixed rate of interest, which may be lower than other investment options such as mutual funds or stocks. This means that the returns on the SCSS may not keep pace with inflation, which can erode the value of your investment over time.
- Limited flexibility: The SCSS is a fixed investment, which means that you cannot make additional contributions or change the investment amount once it is set. This can be a disadvantage for those who may want more flexibility in their investments.
- Long lock-in period: The SCSS has a long lock-in period, which means that the investment cannot be withdrawn before the maturity date. This can be a disadvantage for those who may need access to their funds before the end of the lock-in period.
- Investment limit: The SCSS has a maximum investment limit of INR 15 lakh, which may not be sufficient for those with larger investment needs.
- Age limit: The SCSS is only available to senior citizens, who must be at least 60 years old to be eligible for the scheme.
FAQs on the Senior Citizens Savings Scheme (SCSS)
Can I invest in the Senior Citizens Savings Scheme online?
Unfortunately NO. Since this facility, is for senior citizens only you need to visit the Bank branch or the post office to open the account.
Is investing in the Senior Citizens Savings Scheme good?
If you are ultra-conservative and want to invest in safe investment options then investing in SCSS is good. There are alternatives such as debt mutual funds which can give you similar returns with little risk but debt funds offer you the flexibility of withdrawing money quickly whereas SCSS has a lock-in period of 5 years.
Is SCSS tax-free?
Investment in SCSS qualifies for tax exemption under 80C. However, interest earned via SCSS is fully taxable according to the tax slab of the investor.
Can I invest more than 15 lakhs in SCSS?
Yes. in Budget 2023, the investment limit in SCSS has been increased from Rs 15 Lakhs to Rs 30 Lakhs per annum.
Is SCSS interest paid monthly?
The interest in SCSS is paid on 31 March, 30 June, 30 September, and 31 December every year.