Senior Citizen Savings Scheme (SCSS) – SCSS Interest Rate 2024

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5 min read

Updated on Jan 28, 2024

Indian citizens above the age of 60 years for their retirement. The policy serves as a regular income source for the elderly with the benefits of tax exemption.

Elderly citizens can invest in the policy with a lump sum amount on an individual or joint account basis to earn a steady monthly income as well as tax benefits. This account can be opened in a bank or a post office.

To benefit the elderly further with this scheme, the government recently increased the maximum amount that can be deposited from INR 15 lakh to INR 30 lakh.

Let’s look at the interest rate and other features of the plan in detail.

Highlights of Senior Citizens Savings Scheme (SCSS)

Tenure of SCSS 5 years
Minimum Investment  INR 1000
Maximum Investment  INR 30,00,000
Rate of Interest   8.2% per annum
Premature closure  The account can be closed prematurely
Tax Benefits Up to INR 1.5 lakh under section 80C
Nomination  You can nominate a family member as a nominee

Senior Citizen Saving Scheme (SCSS) Interest Rate 2024

Currently, Senior Citizen Saving Scheme (SCSS) is available at an interest rate of 8.2% per annum from January 1, 2024 to March 31, 2024. Compared to the rate of interest of schemes like FDs or Saving accounts, SCSS offers better returns.

How is Interest Calculated under SCSS?

Interest under SCSS is compounded on a quarterly basis and is paid on the first working day of April, July, October, and January.

Below are the key components to evaluate the SCSS interest rate –

  • The principal amount
  • Interest rate
  • Maturity period

Here, the maturity period remains fixed, while the principal and interest vary. The interest rate applicable at the time of investing in the scheme is used for calculating interest.

SCSS Eligibility 

The eligibility criteria for the SCSS include:

  • Any individual who is 60 years or above can open an SCSS account
  • Any Individual within 55 to 60 years of age and who has retired on superannuation is eligible
  • Any individual having attained 55 years of age and retiring before the SCSS rule implementation is eligible
  • NRIs cannot open an SCSS account
  • Hindu Undivided Families or HUFs cannot open an SCSS account

Key Features of SCSS

Let’s take a look at the features of SCSS below:

Deposit mode – Applicants can deposit the amount under SCSS in cash if the sum is below INR 1 lakh. However, if the deposit amount is more than INR1 lakh, they may make the payment through cheque.

Scheme Maturity – The SCSS matures in 5 years. However, this period can be extended for 3 more years by writing an application submitted in the 4th year of the scheme.

Accounts – You can have more than one SCSS account on an individual or joint account basis with your spouse.

Account transfer – You can transfer an SCSS account from the post office to the bank and from a bank to a post office easily.

Premature closure – The SCSS amount can be prematurely withdrawn within a year of account opening without paying any premature closure charges. If the account is closed after a year and before two years of account opening, you will be levied a 1.5% charge on the principal amount. Similarly, if the SCSS account is closed after completing two years and before 5 years of opening the account, you will be charged 1% of your principal amount.

Reasons to Avail of SCSS 

Here are some reasons that make availing of SCSS worthwhile:

  • Being a government-backed investment, SCSS is regarded as safe and reliable
  • Opening an SCSS account is a simple process. You can open an SCSS account in an authorized bank or a post office
  • SCSS account can be transferred from one bank/PO to another
  • The scheme is available with a high rate of interest
  • Income tax deduction is available for up to INR 1.5 lakh u/s 80C of the IT Act
  • The tenure of the scheme is 5 years. However, it can be prolonged for another 3 years

How to Apply for SCSS?

An SCSS account can be opened at a bank (Authorized) or a post office in India. You may open an SCSS account at a bank online through the bank portal or mobile app. However, you have to visit a post office to open the SCSS account personally.

The SCSS form is available at the India Post website to download. You can download the form, fill it out, and submit it to a post office near you with the required documents to open an account.

Documents Needed to Open SCSS Account

  • Two photographs (passport-size)
  • ID proof like PAN, Voter ID, Passport, Aadhaar
  • Address proof like Aadhaar, telephone bill, etc.
  • Age-proof PAN, Voter ID, birth certificate, Senior citizen card, etc.
  • Self-attested documents

Tax Deductions under SCSS

SCSS allows tax benefits u/s 80C of the IT Act, allowing eligible individuals to get tax deductions of up to INR 1.5 lakh. However, your TDS will be deducted if the interest earned is beyond INR 50,000 per annum.

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Conclusion

SCSS is a scheme with good returns suitable for elderly citizens who are looking for a risk-free return. With an 8.2% interest rate and an enhanced investment amount of up to INR 30 lakh, each investor is likely to earn good returns under the scheme. The disadvantages of the senior citizen savings scheme are much lower as compared to its advantages. Hence, it is one of the best schemes for the elderly.

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FAQs: Senior Citizen Savings Scheme (SCSS) Interest Rate January 2024

Can I extend my SCSS account duration?

Yes, you can extend the SCSS scheme duration for three years within one year of maturity.

Can I and my spouse have separate accounts of SCSS?

Yes, if you and your spouse are above 60 years of age, you can open individual Post Office senior citizen interest rate accounts.

Is TDS deducted from the interest earned on SCSS?

Yes, TDS is deducted on the interest earned in case the interest earned exceeds INR 50,000 per annum. For interest below INR 50,000 per annum, TDS is not applicable if you submit Form 15G/15H.

Can I transfer my SCSS account from one post office/bank to another?

Yes, you can transfer the SCSS account from one deposit office to another using Form G.

In the case of a joint account, what is the share of the joint account holder?

Under SCSS, the whole amount at maturity is attributed to the first/primary account holder. The spouse in a joint account does not have many rights in this case.

What happens to the SCSS account if the account holder dies?

If the account is opened with no joint investor and if the account holder dies, unfortunately, the SCSS account will be closed. For such closure, the nominee of the account holder has to forward an application.

Are NRIs, PIOs, and HUFs eligible to invest in the SCSS?

No, NRIs, PIOs, and HUFs are not eligible to invest in SCSS.

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Jan 22, 2024
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PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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