Senior Citizen Saving Scheme is the one of the best savings plan for senior citizens in India.
SCSS is a five-year Government pension scheme for seniors aged 60 and above. The Government of India introduced this scheme in 2004, intending to provide regular and steady income to senior citizens in India.
SCSS account offers competitive interest rate of 8% per annum to senior citizens. It is 100% safe scheme as it is backed by GOI.
Any Indian citizen 60 or above can buy SCSS Scheme through post office, PSU banks or and private banks also.
Table of Contents
What is the Senior Citizen Savings Scheme (SCSS)?
The Senior Citizen Savings Scheme (SCSS) is a government-backed investment scheme designed exclusively for senior citizens. It offers a high-interest rate, guaranteed returns, and regular income, making it one of the best savings options for retirees in India.
Why SCSS?
✔ Risk-free investment backed by the Government of India
✔ Attractive interest rate (currently 8.2% per annum for 2024/2025)
✔ Quarterly payouts for a steady income flow
✔ Tax-saving benefits under Section 80C
Who Can Open an SCSS Account? (Eligibility Criteria)
SCSS is designed specifically for retirees.
- Age Criteria : Any Indian resident aged 60 or above are eligible
- Early Retirement Provision: Those aged 55-60 who have taken voluntary or superannuation retirement can invest within one month of receiving retirement benefits.
- Personnel of Defence Services (excluding civilian defence employees) of age 50 or more can also open the account.
- Who can’t invest -NRIs and HUFs cannot invest in SCSS.HUF and NRI can not open the SCSS account.
How Much Can You Invest in SCSS? (Deposit Limits)
✔ Minimum Deposit: Rs. 1,000
✔ Maximum Deposit: Rs. 30 lakh (increased from ₹15 lakh in Budget 2023)
✔ Investment tenure: 5 years (extendable by 3 more years)
✔ Joint Account: Allowed only with a spouse (the first depositor holds primary eligibility) ✔ Account limit: Multiple Accounts are allowed that is subject to maximum deposit limit of 30 lakh ( all accounts put together should not have more than 30 lakh ( in individual account)).
SCSS Interest Rate 2025 & How It Works
One of the biggest advantages of SCSS is its high interest rate compared to Fixed Deposits (FDs), Recurring Deposits (RDs), or PPF.
- Current SCSS Interest Rate (Jan – March 2025): 8.2% per annum
- Interest Payout: Every quarter (April, July, October, January)
- Guaranteed Returns: Fixed by the Government, ensuring security
How Much Will You Earn from SCSS?
Let’s say you invest ₹30 lakh in SCSS. Here’s what you get:
✅ Quarterly payout: ₹61,500 ( every 3 months)
✅ Annual income: ₹2,46,000
✅ 5-year total earnings: ₹12,30,000 (excluding principal amount)
This guaranteed income ensures that senior citizens enjoy financial security post-retirement. But how do you open an SCSS account? Let’s find out.
How does SCSS work?
Initially, deposit a lump sum amount. You get a tax deduction of up to Rs 1,50,000 under section 80C for the first year only( no deduction if you do not deposit further).
Thereafter you will receive interest every quarter. Your principal amount is returned back to you after completion of 5 years.
Benefits of Senior Citizen Savings Scheme:
- Attractive Interest Rates: Earn high returns with government-fixed interest rates, currently at 8.2% per annum (as of Q1 2025).
- Regular Income: Interest is paid quarterly, providing a stable source of income for retirees.
- Safety and Security: Backed by the Government of India, ensuring capital protection and low risk.
- Tax Benefits: Enjoy tax deductions of up to ₹1.5 lakh under Section 80C of the Income Tax Act.
- Flexible Investment Amount: Invest a minimum of ₹1,000 up to a maximum of ₹30 lakh.
- Premature Withdrawal: Allows early withdrawal with a nominal penalty, offering liquidity in emergencies.
- Easy Account Opening: Can be opened at designated banks and post offices across Ind
How to Open an SCSS Account? (Step-by-Step Guide)
You can open an SCSS account at:
Banks (SBI, ICICI, HDFC, PNB, etc.)
Post Offices (Available at all post office branches)
Steps to Open an SCSS Account
Step 1: Visit your nearest bank or post office
Step 2: Fill out the SCSS account opening form
Step 3: Submit the required documents (listed below)
Step 4: Deposit a minimum of ₹1,000 (up to ₹30 lakh)
Step 5: Get your passbook – and start earning!
Documents Required for SCSS
- PAN Card
- Aadhaar Card (Identity & Address Proof)
- Age Proof (Birth Certificate, Voter ID, or Passport)
- Retirement Proof (if applicable for 55-60 years old investors)
- Recent passport-sized photographs
Once your account is active, you start receiving interest payments every 3 months
Where can you open SCSS Account
you can open the account in any post office, PSU banks or private banks.
List of banks which offer SCSS accounts
- Andhra Bank
- Bank of India
- Bank of Maharashtra
- Allahabad Bank
- Punjab National Bank
- Indian Bank
- Indian Overseas Bank
- United Bank of India
- Corporation Bank
- Canara Bank
- Dena Bank
- Syndicate Bank
- Central Bank of India
- UCO Bank
- Union Bank of India
- ICICI Bank
- Axis Bank
- HDFC Bank
Senior Citizen Saving Scheme Tax Benefit & Deductions
- Section 80C Benefit: Investments up to ₹1.5 lakh are tax-deductible
- Quarterly Income taxation: Income received is fully taxable under head income from other sources.
- TDS (Tax Deducted at Source): If interest exceeds ₹50,000 per year, TDS is deducted at 10%
- To Avoid TDS: Submit Form 15H or 15G (if total income is below taxable limit)
When you deposit money, you get a tax deduction. But this is to notice that whether you deposit 1.5 lac or 30 lac, you will get tax deduction upto 1.5 lac only.
Smart Tip: Combine SCSS with PPF for a balanced tax-free retirement strategy.
Premature Withdrawal & Closure Rules
- Early Withdrawal Allowed? Yes, but with conditions:
- Before 1 year: No withdrawal allowed
- After 1 year but before 2 years: 1.5% penalty
- After 2 years: 1% penalty
Can You Extend SCSS Beyond 5 Years?
Yes! Extend for 3 more years with the same interest rate.
Maturity Period of SCSS
Senior Citizen Saving Scheme get matures after completion of 5 year. However, you can extend it further for next 3 years.
SCSS Calculator
SCSS Extension Period
You can extend SCSS account for further 3 years but within one year of maturity by giving an application form.
Premature closure of account at any time, after one year of extension without any deduction.
Frequently Asked Questions
Which bank is best for senior citizen Saving Scheme?
Senior citizen saving scheme offered by Indian post office. Furthermore, you can avail scheme to some of the designated banks also.
It does not matter that from where you purchase SCSS scheme. But still this will remain Government sponsored scheme always.
Opening SCSS scheme through banks may get you some additional advantages such as:
- You can directly transfer funds to your SCSS account, if you have savings bank account in the same bank.
- Direct interest transfer to your bank account. Moreover, you also get money transfer notification from your bank through SMS and account statement.
- In addition you may also get online banking facility from your bank, which is not available with post office.
- Moreover ,Can also initiate withdrawal request online without any hassle.
Is SCSS interest taxable?
Senior Citizen Saving Scheme interest is fully taxable in the hands of the recipient. TDS is also applicable if interest amount is more than 50000 in a financial year. The interest income up to Rs 50000 is not taxable for senior citizens.
What is the benefit of SCSS?
SCSS Account has everything that a senior can ask for.
Senior Citizen Saving Scheme offers you principal security, fixed income and return back of your principal amount after completion of 5 years.
Additionally, you also get income tax deduction in the year you deposit money.
How much interest is tax free for senior citizens?
Interest income up to Rs 50000 is tax free for senior residents of India.
Is TDS applicable to senior citizens savings scheme?
TDS is applicable on SCSS account on income above Rs 50000 in a Financial Year. But if your income is below taxable limit, then you can deposit form 15H. Certainly you have to deposit this form each financial year to avoid tax.
Is SCSS interest rate fixed?
The interest rate remains fixed for a buyer.
For an example,
Mr. Gupta invested in senior citizen Saving Scheme in 2017.
The interest rate was 8.5 percent at that time and now the current in interest rate is 7.4 percent.
Here, the interest rate of 8.5 % will remain same for Mr. Gupta. There will be no change in interest rate for him.
For new buyer new interest rate will be applicable.
