Senior citizens in India can avail the benefits of the Senior Citizens Savings Scheme (SCSS). Backed by the government of India, the SCSS provides people above the age of 60 access to regular income. This makes them financially independent, empowering them to live the way they want.
How to apply for the Senior Citizens Savings Scheme (SCSS)?
Senior citizens for the SCSS either at an authorised bank or the post office.
Applying for Senior Citizens Savings Scheme (SCSS) at the Post Office:
Here’s how to apply for SCSS at the post office:
- Collect the application form from your nearest post office branch. You can, alternatively, also get it online.
- Start filling the form. Enter the name of the post office branch on the top left corner of the form.
- Open a savings account with the post office, if you don’t have one already. If you do, enter the account number wherever it is asked.
- Input the branch address of the post office under the “To” section.
- Enter the account holder’s name, paste his/her photograph, and tick on the ‘SCSS’ option.
- If you’re opening a savings account as well, select the applicable options under the “Additional Facilities Available” section. If not, ignore it.
- Now, select the account holder type. The available options are self, minor through guardian, or person of unsound mind through a guardian.
- Choose the account type, from single, either or survivor, or all or survivor.
- The next step is to enter the deposit amount. The minimum amount that you need to invest is again ₹10,000. Enter the amount that you wish to deposit in both figures as well as words. You can pay through cheque as well. Write down the cheque number and date, if that is the case.
- Proceed by entering the personal details of the account holder, or holders it is a joint account.
- Whatever documents you are providing as proof, ensure that you tick it in the cells at the end of the table.
- All account holders might sign page 1 as well as page 2 of the form.
- If you are choosing a nominee, enter his/her details of the nominee. Ensure to get a sign of everyone included in the account.
Applying for Senior Citizens Savings Scheme (SCSS) at a Bank:
Senior citizens can open an account under the SCSS at the following banks:
- Allahabad Bank
- Andhra Bank
- Bank of Maharashtra
- Bank of Baroda
- Bank of India
- Corporation Bank
- Canara Bank
- Central Bank of India
- Dena Bank
- IDBI Bank
- Indian Bank
- Indian Overseas Bank
- Punjab National Bank
- State Bank of India
- Syndicate Bank
- UCO Bank
- Union Bank of India
- Vijaya Bank
- ICICI Bank
Follow these steps to open an SCSS at any of these banks:
- Go to the nearest branch of any of these banks and open a savings account with them.
- Then, request them for the SCSS application form.
- Carefully fill the form, along with the required documents.
- Deposit the amount that you can invest. The minimum investment amount is ₹10,000 and the maximum is ₹15 lakh, or the amount you received while retiring (whichever is lower).
- After the payment has been received, your SCSS account will be opened.
Eligibility Criteria of SCSS:
You can invest in SCSS if you belong to one of the following categories:
- An individual who is over the age of 60.
- Retired Civilian Employees between the ages of 55 and 60, with the restriction that the investment is made within one month of receiving pensions.
- Defense Retired Employees between the ages of 50 and 60, with the restriction that the investment is made within one month of receiving retirement benefits.
- non-resident Indians (NRIs) or persons of Indian origin (PIOs) are not eligible to make an investment in SCSS.
- In addition, members of the Hindu Undivided Family (HUF) are not qualified to make investments under the SCSS.
Benefits of SCSS:
Guaranteed Regular Income: Regular income is guaranteed under the scheme in the form of interest payments. Every quarter interest is calculated. Every quarter, the investor’s account is credited with the same amount. The interest payments shall be made per financial year on 1 April, 1 July, 1 October and 1 January.
High-Interest Rate: The current rate of interest for April–June(2020–2021) is 7.4%. Each quarter, the interest rate is evaluated. It is also subject to modification on a regular basis by the Ministry of Finance.
Tax Benefits: SCSS investment can be tax exempted under Section 80C. On the other hand, interest earned is taxable. If the sum exceeds Rs. 50,000, TDS is deducted on interest.
Tenure: This scheme has a five-year lock-in term,i.e, in 5 years it matures. However, the investment in the scheme can be extended for another three years.
Deposit Limits on SCSS:
In the Senior Citizens Savings Scheme, the minimum investment is Rs. 1,000 in the multiples of 1000 while the maximum investment is Rs. 15 lakhs.
Investment in SCSS accounts can be deposited in cash but only amounts less than 1 lakh are permitted. It is mandatory to use cheque/demand drafts for deposits exceeding Rs. 1 lakh. When paying by cheque, the date on which the cheque clears becomes the account’s opening date.
You are eligible to withdraw your SCSS Deposit after 1 year of opening, but there are penalties in such situations. The penalty is calculated based on when you remove the funds.
If you leave this scheme before the two-year period has passed, a penalty of 5% of your deposit will be withheld as a penalty.
If you leave this scheme between 2-5 years after opening your account, you will be charged 1% of your SCSS deposit as a penalty.
Documents Required for SCSS:
- Aadhaar Card
- PAN Card
- Voter ID
- Birth Certificate/Senior Citizen Card
- Electricity Bill/Telephone Bill
- Two passport-sized photographs
- Completely filled Form A
All of the above documents must be submitted with self-attested photocopies to the account opening branch.
Historical Rate of Interest for SCSS:
The interest rate for the SCSS is currently reduced from 8.6% to 7.4%. Compared to savings and Fixed Deposit accounts, the returns from the SCSS are high. The following table shows the SCSS interest rates:
|Timeline||Rate of Interest|
|April 2020 – Sept 2020||7.40%|
|July 2019 – Mar 2020||8.60%|
|Oct 2018 – June 2019||8.70%|
|July 2017 – Sept 2018||8.30%|
|April 2017 – June 2017||8.40%|
|Oct 2016 – Mar 2017||8.50%|
|April 2016 – Sept 2016||8.60%|
|April 2015 – Mar 2016||9.30%|
Frequently Asked Questions (FAQs):
Q. What is the joint account holder’s share of the deposit in an account?
Ans: The entire deposit is credited to the first applicant or depositor. In this situation, it does not matter whether a partner is added as a joint account.
Q. Is it possible for both partners to open separate accounts?
Ans: Individual accounts can be opened as well, as long as the deposit limit is not exceeded by more than Rs.15 lakh. Of course, the scheme’s rules must be followed.
Q. Is there a discount/exemption on income tax?
Ans: Yes, under Section 80C of the Indian Tax Act, 1961, you can claim a tax deduction of up to Rs. 1.5 lakh.
Q. Is it possible to move an account from one deposit office to another?
Ans: An account can be moved from one deposit office to another using Form G.
Q. If I were to pass away then what will happen to my account?
Ans: If you have an independent account (without a joint investor) and you pass away suddenly, your SCSS account will be closed. The account holder’s nominee must submit an application through Form ‘F’ to effect such a closure. The public notary or the Oath Commissioner shall certify Annexes II&III of such a form.