Senior Citizens Savings Scheme (SCSS) is a government-backed retirement benefit programme for senior citizens. The scheme allows senior citizens receive a regular income by depositing a lump sum amount. SCSS account can be opened in post office or any bank authorised by the RBI to operate such programme. The key benefits of this savings scheme are steady income post retirement and income tax deduction under Section 80C of the Income Tax Act.
Key features of Senior Citizens Savings Scheme (SCSS)
Under this scheme, a senior citizen can open an account with a minimum deposit of Rs 1000 in the multiples thereof, while the maximum deposit can go up to Rs 30 lakh.
SCSS account can be opened by an individual who has attained the age of 60 years or above on the date of opening of the account. Also, the government allows account opening for those individuals who have attained the age of 55 years or more but are less than 60 years and retired under superannuation, VRS or special VRS.
Retired personnel of Defence Services (excluding Civilian Defence employees) may open an account on attaining the age of fifty years subject to the fulfilment of other specified conditions.
Senior Citizens Savings Scheme can be opened individually or jointly with spouse.
At present, Senior Citizens Savings Scheme subscribers are offered 8.2% interest rate on their deposits. The interest is settled and credited on a quarterly basis. Interest is paid on the first day of April, July, October, and January.
The SCSS account can be closed after expiry of 5 years from the date of opening of account. The depositor may extend the account for further period of 3 years. Premature closure is permissible subject to certain conditions.
Senior Citizens Savings Scheme interest calculator:
Let’s assume that an SCSS account is opened with Rs 30 lakh and continued for 5 years. At an interest rate of 8.2% per annum, the depositor gets Rs 61,500 interest on a quarterly basis.
Deposit amount: Rs 30 lakh
Rate of return: 8.2%
Tenure: 5 years
Total maturity amount: Rs 42,30,000
Total interest earned: Rs 12,30,000
Quarterly interest credit: 12,30,000/20= Rs 61,500
Senior Citizens Savings Scheme (SCSS) tax benefits:
Senior Citizens Savings Scheme subscribers get income tax deduction benefits of up to Rs 1.5 lakh under Section 80C of the Income Tax Act, 1961.