The Senior Citizen Saving Scheme is a government-backed retirement benefit scheme meant to safeguard the interests and the future of senior citizens in India. Originally introduced as a post-office savings
scheme, the SCSS has now also been made available at government banks for citizens aged 60 and above, owing to its heavy demand for registration.
This post-retirement saving scheme is a fixed-income investment instrument. Individuals invest a lump sum amount once and see their investment grow into a significant value during a five-year tenure. In this period, a registered SCSS account earns steady interest and enjoys tax benefits as per the government’s Income Tax Act.
Any working professional who approaches the retirement age wishes to have enough in the bank to continue supporting their lifestyle choices amid rising inflation and other uncertainties. Nobody wants to put their family’s future at risk. Due to the Indian government’s extensive support, the Senior Citizen Saving Scheme has become a risk-free and assured investment option for such individuals. Not only are your deposits safe and secure, but they also grow over time.
Interest Rate
Since the Senior Citizen Saving Scheme is a fixed-investment scheme, it earns regular interest for registered individuals. The interest is fetched on the amount deposited in the SCSS account, which gets directly credited to your bank account at the start of each quarter during a financial year in April, July, October, and January. The interest rate for the 2025-26 SCSS is 8.2 per cent.
Rules
The Senior Citizens Savings Scheme account can be linked with more than one individual. Apart from opening the account in your name, you can also jointly register with your spouse. As for nominees, they need to be added to the SCSS account documents during the time of opening or later on. While the scheme matures after every five years, eligible individuals can apply for an extension of 3 years by applying in the fourth year.
No penalty is imposed if a person wishes to make a premature withdrawal after one year of opening the account. But for those who close an account between the end of the first year and the end of 2nd year, a penalty of 1.5 per cent of the principal amount applies.
Key Changes
According to the updated regulations of the SCSS scheme as per the Union Budget of 2023, the maximum ceiling of deposits in the scheme has been raised to Rs 30 lakh from the previous Rs 15 lakh. Senior citizens can invest any amount between Rs 1000 and Rs 30 lakhs in a lump sum at the point of opening the account. Notably, the deposit has to be made within a month of receiving all retirement benefits from an individual’s employer.
