The Senior Citizens Savings Scheme (SCSS) account is designed to offer superior returns to senior citizens, along with security of the money. It could be viewed as a retirement benefit account as it is only available to people above 60, with some exceptions. Along with excellent returns and safety, the account also offers tax benefits.
By paying out interest every quarter to a designated account, the scheme fulfils one of the primary objectives of the scheme of providing regular income for seniors.
The account can be opened with the Post Office or with designated public and private sector banks.
With banks offering the facility of opening and closing the account online, it has become easier to open this account for people who have shied away from transacting at post offices.
Benefits
Excellent Returns
The return offered SCSS is 8.2% currently and is the highest amongst all assured-return, government guaranteed schemes if you look at the comparative returns of all schemes under the section on government schemes.
Historically, SCSS has offered attractive rates of interest, as demonstrated by the 10-year history below:
|
From
|
To
|
Interest Rate
|
|---|---|---|
|
1 Apr 2012
|
31 Mar 2013
|
2.30
|
|
1 Apr 2013
|
31 Mar 2015
|
9.20
|
|
1 Apr 2015
|
31 Mar 2016
|
9.30
|
|
1 Apr 2016
|
30 Sep 2016
|
8.60
|
|
1 Oct 2016
|
31 Mar 2017
|
8.50
|
|
1 Apr 2017
|
30 Jun 2017
|
8.40
|
|
1 Jul 2017
|
30 Sep 2018
|
8.30
|
|
1 Oct 2018
|
30 Jun 2019
|
8.70
|
|
1 Jul 2019
|
31 Mar 2020
|
8.60
|
|
1 Apr 2020
|
30 Sep 2020
|
7.40
|
|
1 Oct 2022
|
31 Dec 2022
|
7.60
|
|
1 Jan 2023
|
31 Mar 2023
|
8.00
|
|
1 Apr 2023
|
31 Dec 2023
|
8.20
|
Tax Benefits
The amount invested in the scheme is eligible for Income Tax deduction under section 80C, up to the maximum allowed limit of Rs. 1.5 lacs.
The interest earned on the account, however, is not exempt and is added to the account holder’s taxable income for the year.
Security
Being a government scheme, it offers the highest level of security to account holders.
Features
An account can be opened with a minimum of Rs. 1,000. The account operates like a Fixed Deposit. Once opened, you cannot add or subtract from it. At the time of closure, the full amount has to be withdrawn.
Multiple accounts can be opened subject to a maximum limit of Rs. 30 lacs at any point of time.
An account holder may operate more than one account under this Scheme subject to the condition that the deposits in all the accounts taken together shall not exceed the maximum limit as specified under
The account can be opened by a person who has reached the age of 60. This is lowered, with some conditions, to:
- 55 for people who have retired under Superannuation, VRS or Special VRS.
- 50 for retired Defence Services personnel
Interest is paid on the first working day of the calendar quarter for the previous quarter.
On expiry of the account on completion of 5 years, the account can be closed or extended for another 3 years.
Competition
The SCSS is closest in its method of operation to Fixed Deposits. You can place money in an account only once, after which it keeps paying you interest every quarter. The rate of interest is determined on the day you open an account and remains unchanged during the period the account is live, unlike a PPF account where the updated interest rates are applicable on the entire balance in the account.
Of course, this account offers better interest rates, along with tax benefits at the time of opening the account.
The SCSS scheme also competes with government bonds.
Website
https://nsiindia.gov.in/InternalPage.aspx?Id_Pk=169
Recommendation
Should be subscribed by everyone who is eligible.
Can be opened at Post Offices and designated commercial banks.
