SBI Senior Citizen Savings Scheme – SBI SCSS Interest Rate, Benefits & Eligibility

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Updated on Oct 11, 2022

 

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State Bank of India Senior Citizen Savings Scheme

A risk-free investment scheme for the elderly with assured returns to secure their future, learn all about SBI Senior Citizen Savings Scheme (SCSS)  in this blog.

We work hard all our lives to earn money and meet our financial needs and those of our family. And then we also intend to create some wealth for the future to use in our post-retirement life, when we won’t be able to work or earn as much. This is when we start saving money in our present, locking it away safely in some form or the other, to use in the future.

A lot of us opt for schemes like Fixed Deposits (FDs) for this purpose since they are risk-free. However, FDs fail to generate more returns which does not eventually satisfy our purpose of saving for the future. The senior citizen saving scheme by the SBI is therefore an attempt to assure decent returns to the elderly so they can comfortably enjoy the golden age of their lives.

The saving plan introduced by the State Bank of India (SBI) is backed by the government, which gives some level of assurance to the senior citizens with regard to its safety and guaranteed returns. Under the SCSS, the elderly who are retirees can choose to open a joint account with their spouse and start investing in the account. Investments can be made via any mode – cash, cheque, demand draft, and the like.

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SBI Senior Citizen Saving Scheme Interest Rate

Since the Senior Citizen Saving Scheme SBI is a government-backed plan, the rate of interest offered under the scheme is also in compliance with Govt. rules. As declared by the Govt. of India on April 1, 2020, the SBI Senior Citizen Saving Scheme interest rate was notified at 7.4%.

Unlike some other plans, the interest under SCSS is not paid cumulatively, rather paid to the investor quarterly. This also means that if the investor fails to withdraw the interest at the end of each quarter, no more returns will be payable on the scheme.

7 Benefits of the SBI Senior Citizen Saving Scheme (SCSS)

Investing in the Senior Citizen Saving Scheme of the SBI has a number of advantages for retirees. Some of these are listed below:

  1. SCSS is one of the best ways for the retired elderly to earn steady and assured income to meet their financial requirements post-retirement. This is made possible by the interest payable under the scheme on a quarterly basis. This ensures a fixed form of income to the senior citizens.
  2. The period of investment under SCSS is open for a further extension after 5 years. This means that in case the investor is in no dire need of withdrawing the total return in a lump sum, they can choose to extend the scheme for a further period and keep enjoying returns.
  3. The eligible age of entry for the SCSS scheme is set at only 55 years for those who chose voluntary retirement. This means that once retired, the individual can still look forward to a steady and regular form of income to take care of all their needs and those of their family.
  4. The scheme provides for a lock-in interest rate option. This means that the rate of interest under the SCSS plan stays the same until the maturity of the scheme once the investor or the person holding the account has chosen to lock it. This feature of the SCSS is of great use to account holders, protecting them against a sudden drop in rates of interest.
  5. The SCSS account is also more liquid, allowing the investor to close the account upon completion of 1 year from the date of opening and withdrawing the return.
  6. There is also the option to open more than 1 senior citizen saving scheme accounts under SBI. A senior citizen is permitted to open a joint account with their spouse so that the benefits of the plan can be extended to both the spouses.
  7. Upon completion of the plan tenure at 5 years, the investor is allowed renewal of the scheme, if they so wish to. However, if they then choose to close down the account after renewal, there is no penalty imposed either.

Read More: Senior Citizens Savings Scheme in India – Eligibility, Features and Tax Benefits

Eligibility to Apply for Senior Citizen Savings Scheme SBI

In order to avail the benefits described above under the SBI SCSS, there are certain requirements that must be met. Here is the eligibility criteria to apply for the scheme:

  • The entry age criteria to be eligible for the plan has been set at 60 years or above. However, entry for the plan is permitted at 55 years as well, though only for those individuals who have opted for the Voluntary Retirement Scheme (VRS).
  • The SBI SCSS allows for opening of a single or joint account with the spouse to avail the benefits of the scheme.
  • Some retired officials from the defense services of India at 50 years of age are also allowed entry to the plan.
  • Non-Resident Indians (NRIs) and members of the Hindu Undivided Family (HUF) are not eligible to apply for the scheme.

Procedure for Investment in SBI Senior Citizen Saving Scheme (SCSS)

The process for applying for the SBI Senior Citizen Saving Scheme is quite simple and hassle-free. All you need to do is open an account at a SBI branch near you or a post office. You can visit any deposit office and submit the SBI Senior Citizen Saving Scheme Form A for application.

You would also be required to submit a valid proof of age along with the application form. Besides this, to open the account, you would need to deposit a certain minimum amount in multiples of thousand to get the account up and running. Note that you can opt for both single/individual and joint accounts with your spouse under the SBI SCSS plan.

Also note that the maximum limit for deposit in the account is Rs. 15 lakh and the total deposit should not ideally be higher than this limit.

Wrapping Up

At a time when you need finances the most to take care of your needs, the SBI Senior Citizen Savings Scheme is truly a boon for retirees. The scheme also provides for tax benefits along with a multitude of other benefits that can be availed by retirees. To know more about the current rate of interest payable under the plan, you can always check the SBI Senior Citizen Saving Scheme calculator online.

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