Senior Citizen Savings Scheme vs Pradhan Mantri Vaya Vandana Yojana


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Old age is the time when people face greater challenges in life which get worse due to the financial crisis. Hence, saving in advance to secure one’s old age is important. In this post, let’s take a look at some of the pension plans to secure your retirement.    

Planning for your financial future is important, especially to secure your old age. And it should be done at a time when you are still capable of working hard and contributing more towards a plan or investment. Though you may not think about your retired life just after joining a job, you must consider the same at some point in life when you still have enough working years in hand.

One very important aspect why everyone should plan and save enough for the future to secure their old age is the medical or healthcare reason. The cost of healthcare services is on a constant rise as seen over the last few years. Elderly people without enough means to earn find it difficult to avail good healthcare services due to the huge medical expenses.

Hence, to aid such elderly people, the government of India has taken many initiatives. Among them include the pension schemes for the elderly to allow them a certain amount of financial support.

Let us discuss two of such pension plans offered by the Indian government namely, Senior Citizen Savings Scheme and Pradhan Mantri Vaya Vandana Yojana.

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What is the Senior Citizen Savings Scheme (SCSS)?

Senior Citizen Savings Scheme or SCSS is a government-backed savings plan crafted particularly for the financial security of the elderly in the country. SCSS provides Indian residents of 60 years and above with a regular income after their retirement. The scheme invests the deposits for a 5-year term, which can be extended for 3 more years.

The scheme aims to organize small savings and turn them into regular returns together with offering tax benefits and investments options.

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Senior Citizen Savings Scheme – Benefits 

SCSS is a savings cum investment plan that suits best for senior citizens. The plan offers a high rate of interest. Below are some benefits of the plan:

  • Easily Available – SCSS scheme is easily available in any bank branch or post office. All you need is to fill the require form to avail the plan
  • Reliable – Being a government backed scheme, the plan is highly secure and reliable
  • Multiple Accounts – Elderly people can open multiple SCSS accounts individually as well as jointly. However, the joint account can be opened with spouse of the primary investor
  • Good Returns – At 7.4% per year, the SCSS interest rate is good enough to offer satisfying returns
  • Flexible Duration – The SCSS is available for five years, which can be extended for 3 more years
  • Tax Saving Option – SCSS allows the senior citizens to avail income tax exemptions
  • Premature Termination – SCSS scheme accounts can be closed if the elderly goes through a financial crisis. However, the scheme has to be active for 365 days with a 1.5% penalty charge. However, if the plan is terminated after 2 years, 1% penalty is deducted
  • Minimum Paperwork – There is hardly any paperwork required during the application process of the SCSS plan.

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Senior Citizen Saving Scheme – Eligibility 

Below are the eligibility criteria for Senior Citizen Saving Scheme:

  • You must be an Indian citizen of 60 years or above. In case of VRS, the person can be 55-60 years of age
  • In case of joint account, the age of the primary account holder is taken into consideration for eligibility and doesn’t depend on the secondary policyholder.

Senior Citizen Saving Scheme Account – Documents Needed

To open an SCSS account in India, you need the documents mentioned below:

  • Submit application form that is duly filled
  • Submit KYC form
  • Applicant’s Photographs
  • Applicant’s PAN or Permanent Account Number
  • Address proof of applicant
  • Age Proof of applicant
  • Employer’s certificate (for retirees)
  • Proof of retirement benefits disbursal date

What is Pradhan Mantri Vaya Vandana Yojana (PMVVY)?

Another good plan offered by the government of India for the elderly is the Pradhan Mantri Vaya Vandana Yojana. This is a non-linked and non-participating pension scheme with a rate of interest that is approved by IRDAI. The PMVVY scheme offers a loan facility, which could be recovered from the pension amount payable under the plan. The PMVVY interest rate is close to 8% per annum.

Pradhan Mantri Vaya Vandana Yojana – Benefits

Below are the benefits offered under the policy:

  1. Pension Payment – The insured under this scheme receive pension if he/she survives through the entire policy term of 10 years.
  2. Death Benefit – In the unfortunate event of demise of the policyholder during the policy term, the nominee is offered the total purchase price.
  3. Maturity Benefit – Again, in case the policyholder survives the plan for the 10-year duration, he/she gets the purchase price back along with the final pension instalment.
  4. Surrender benefit – In the event of an emergency, the plan allows the insured to exit prematurely. This is especially in case of any critical/terminal illness of the insured or spouse. In that situation, the Surrender Value received is 98% of policy Purchase Price
  5. Loan benefits – The scheme allows a loan facility that is available after the insured completes 3 years into the policy. A maximum of 75% of Purchase Price is offered as loan
  6. Tax benefits – The policy also offer income tax exemption on prepaid premiums as per laws

Pradhan Mantri Vaya Vandana Yojana – Eligibility 

Below are the criteria of eligibility under this plan:



Tenure of policy 10 years
Premium paying term 10 years
Premium payment mode Yearly, semi-yearly, quarterly and monthly
Age of entry 60 years
Age of maturity 70 years
Grace period 30 days
Sum assured INR 1,11,000 available
Liquidity Loan is available

Pradhan Mantri Vaya Vandana Yojana Account – Documents required 

  • ID proof – Passport, Aadhar card, Birth certificate, driving license, Voter ID card, Ration card, etc.
  • Address proof – Gas bill, Electricity bill, Aadhar Card,
  • Bank statements, tax statements etc.

Difference between SCSS and PMVVY Scheme details

Below are the differences between SCSS and PMVVY to know the plan better:

Tenure of policy 5 years (can be extended for 3 more years) 10 years
Premium payment frequency Quarterly Yearly, semi-yearly, quarterly and monthly
Age of entry 60 years and above or 55 – 60 years (in some cases) 60 years and above
Taxability Tax benefits available Tax benefits available
Return 7.4% annual interest rate 1,11,000 maximum Sum Assured

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To Sum Up

Be it SCSS or PMVVY, both the plans have their benefits and disadvantages. The benefits offered under the two plans can be availed during your retirement years. Moreover, both these plans are government backed and offer guaranteed returns.

Further, a policyholder can use a PMVVY or SCSS calculator to calculate the maturity amount under these plans.

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FAQs: Senior Citizen Savings Scheme Vs Pradhan Mantri Vaya Vandana Yojana

Is the senior citizen savings scheme better than PMVVY?

Both the plans have their own unique benefits. However, the SCSS allow the facility of easy premature withdrawal options which are less stringent as compared to PMVVY.

Which saving scheme is best for senior citizens?

Some of the best plans for senior citizens include;
Senior Citizen Savings Scheme (SCSS) 
Pradhan Mantri Vaya Vandana Yojana (PMVVY)
Post Office Monthly Income Scheme (POMIS) etc.

What is the last date to invest in PMVVY?

The last date to invest in PMVVY is March 31, 2023.

Is SCSS tax free?

Section 80C of the Income-tax Act, 1961 allows a deduction for contributions to SCSS.

What is the PMVVY disadvantage?

Limited Access to Money and Premature Exit options are its limitations

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Mar 17, 2023
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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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