SENIOR CITIZENS SAVINGS SCHEME : Investment plan for Senior Citizens

SENIOR CITIZENS SAVINGS SCHEME ( SCSS )

GOVERNMENT OF INDIA’S SENIOR CITIZENS SAVINGS SCHEME Operated by Post Offices , Public Sector Banks and other selected banks .INVESTMENT LIMIT RAISED TO RS 30 LAKHS FROM RS 15 LAKHS EFFECTIVE 01.04.2023 ​INTEREST RATE HIKED TO 8.20 % PA

WHAT IS SCSS SCHEME ?

Government of India had launched the Senior Citizens Savings Scheme( SCSS ) for the sake of senior citizens in the year 2004. The scheme is also operated by India Post and via Public Sector Banks (PSBs) and other banks who are managing the PPF Scheme across the country.
The scheme is a safe investment option as it is backed by the Government of India . It’s a Five year investment plan and can be extended by another 3 years .
WHO CAN OPEN A SCSS ACCOUNT ?
​i) An individual above 60 years of age.(ii) Retired Civilian Employees above 55 years of age and below 60 years of age, subject to condition that investment to be made within 1 month of receipt of retirement benefits.(iii) Retired Defense Employees above 50 years of age and below 60 years of age, subject to condition that investment to be made within 1 month of receipt of retirement benefits.(iv) Account can be opened as individual capacity or jointly with spouse only.(v) The whole amount of deposit in a joint account shall be attributable to the first account holder only.

INTEREST PAYABLE ON SENIOR CITIZENS SAVINGS SCHEME :

From 01.04.2020 , interest rates are as follows:-

• • 7.4 ​% per annum, payable from the date of deposit of 31st March/30th Sept/31st December in the first instance & thereafter, interest shall be payable on 31st March, 30th June, 30th Sept and 31st December.

  • The interest rate is increased to 8.20 % pa from 01.04.2023

(i) Interest shall be payable on quarterly basis and applicable from the date of deposit to 31st March/30th June/30th September/31st December.(ii) If the interest payable every quarter is not claimed by an account holder, such interest shall not earn additional interest.
(iii) Interest can be drawn through auto credit into savings account standing at same post office, or ECS. In case of SCSS account at CBS Post offices, monthly interest can be credited into savings account standing at any CBS Post Offices.(iv) Interest is taxable if total interest in all SCSS accounts exceeds Rs.50,000/- in a financial year and TDS at the prescribed rate shall be deducted from the total interest paid. No TDS will be deducted if form 15 G/15H is submitted and accrued interest is not above prescribed limit.

HOW MUCH AMOUNT CAN BE DEPOSITED IN SCSS ACCOUNT
Only one deposit in the name of a person can be opened with a minimum balance of Rs1,000 and one deposit n multiple of INR.1000/- maximum not exceeding INR 15 lakh. The maximum is enhanced to Rs 30 lakhs from 01.04.2023
​Note : (i) Minimum deposit shall be Rs. 1000 and in multiple of 1000, subject to maximum limit up to Rs. 15 lakh in all SCSS accounts opened by an individual.
(ii) In case any excess deposit made in SCSS account, excess amount will be refunded immediately to the depositor and only PO Savings Account Interest rate will be applicable from the date of excess deposit to the date of refund.(iii) Investment under this scheme qualifies for the benefit of section 80C of Income Tax Act, 1961.

AMENDMENTS TO SENIOR CITIZENS SAVING SCHEME SCSS .

Following amendments to the scheme is notified by the GOI by Gazette notification dated 7th , November 2023 :
1.PREMATURE CLOSURE : In case the account is closed before expiry of one year from the date of extension, an amount equal to one per cent of the deposit shall be deducted and the balance shall be paid to the account holder.
2. MATURITY : The deposit made at the time of opening of account shall be paid on or after the expiry of five years or after the expiry of each block period of three years where account was extended from the date of opening of account, on an application made in Form-3.
3. ACCOUNT EXTENSION : The account holder may extend the SCSS account for a further block period of three years by making an application in Form-4 within a period of one year from the date of maturity or from the date of end of each block period of three years.
The extension of the account shall be deemed to have been made from the date of maturity or from the date of end of each block period of three years, irrespective of the date of application.
4. ON DEATH OF PREMARY ACCOUNT HOLDER : In case of a joint account, or where the spouse is the sole nominee, the spouse may continue the account by applying to the accounts office, on the same terms and conditions as specified under this Scheme, if the spouse meets eligibility conditions under the Scheme on the date of death of the account holder.
5. INTEREST ON EXTENSION : In case of a joint account, or where the spouse is the sole nominee, the spouse may continue the account by applying to the accounts office, on the same terms and conditions as specified under this Scheme, if the spouse meets eligibility conditions under the Scheme on the date of death of the account holder.

PREMATURE WITHDRAWAL UNDER SCSS :

i) Account can be prematurely closed any time after date of opening.(ii) If account closed before 1 year, no interest will be payable and if any interest paid in account shall be recovered from principle.(iii) If account closed after 1 year but before 2 year from the date of opening, an amount equal to 1.5 % will be deducted from principal amount.(iv) If account closed after 2 year but before 5 year from the date of opening, an amount equal to 1 % will be deducted from principal amount.(v) Extended account can be closed after the expiry of one year from the date of extension of the account without any deduction.
As per new rules dated 07th November 2023 : In case the account is closed before expiry of one year from the date of extension, an amount equal to one per cent of the deposit shall be deducted and the balance shall be paid to the account holder.

PAYMENT OF MATURITY AMOUNT OF SCSS :
The scheme is for 5 years . Account may be closed after 5 year from the date of opening by submitting prescribed application form with passbook at concerned Post Office. In case of death of account holder, from the date of death, account shall earn interest at the rate of PO Savings Account. In case spouse is a joint holder or a sole nominee, account can be continued till maturity if spouse is eligible to open SCSS account and not have another SCSS Account.
EXTENSION OF SCSS : Account holder may extend the account for further period for 3 years from the date of maturity by submitting prescribed form with passbook at concerned post office. Account can be extended within 1 year of maturity. Extended account shall earn interest at the rate applicable on the date of maturity.
As per new rules notified on 7th , November 2023 , The account holder may extend the SCSS account for a further block period of three years by making an application in Form-4 within a period of one year from the date of maturity or from the date of end of each block period of three years. The extension of the account shall be deemed to have been made from the date of maturity or from the date of end of each block period of three years, irrespective of the date of application.

BANKS OPERATING SCSS ACCOUNTS :

FOLLOWING BANKS ARE OFFERING ACCOUNTS UNDER SENIOR CITIZENS SAVINGS SCHEME :
1. .BANK OF BARODA

2. BANK OF INDIA

3. BANK OF MAHARASHTRA

04. CANARA BANK

05.CENTRAL BANK OF INDIA

06.INDIAN BANK

07.INDIAN OVERSEAS BANK

08.PUNJAB & SIND BANK

09.PUNJAB NATIONAL BANK

10.STATE BANK OF INDIA

11.UCO BANK

12.UNION BANK OF INDIA

12. ICICI BANK

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