How Does Senior Citizens Saving Scheme Work in India: 2022 Guide

The Senior Citizen Saving Scheme (SCSS) is designed to meet the post-retirement requirements of those over the age of 60 who have retired via superannuation or the Voluntary Retirement Scheme who are 55 or older but under the age of 60. It provides the maximum interest rate on FD.

The Senior Citizen Savings Scheme’s Key Features

The Senior Citizen Saving Scheme outperforms even the most popular fixed deposits, which are accounts offered by banks and non-banking financial businesses in India that provide investors with more rates than a conventional savings account.

Before enrolling in the plan, investors should be aware of the following crucial features:


Senior Citizen Saving Scheme may be applied for by any Indian citizen living in the nation who is 60 or older.

Individuals who have retired on superannuation or under VRS are eligible if they are 55 years or older. Still, less than 60 years old, provided the account is started within one month of receiving retirement benefits, and the investment amount does not exceed the retirement payments.

Retired members of the armed forces, except civilian defence workers, are eligible to establish an SCSS if they are below the age of 50.

Non-resident Indians (NRIs) are ineligible to participate in the SCSS.

Ownership of an Account

A depositor may run several accounts as long as the investment limit specified by the Government of India does not exceed INR 15 lakh.

Any number of accounts created in an individual capacity and jointly with a spouse only, with up to four nominees per account, is permissible. The total investment in all accounts must not exceed the Senior Citizen Saving Scheme maximum investment limit.


A minimum investment of INR 1000 and a maximum investment of INR 15 lakh are required to start an account.

The depositor must pay in cash for any investment less than INR 1 lakh. Cheque payments are required for any investment over INR 1 lakh. In the event of a check payment, the date of realization of the cheque in the government’s account is set to the same day as the account’s opening.

Interest Rates

The state determines the maximum interest rate on FD on a Senior Citizen Saving Scheme investment each fiscal year.

For example, the interest rate in FY19-20 was set at 8.60%, whereas in FY20-21, it was set at 7.40%

Account Closure Too Soon

It is permissible to close the SCSS account before the five-year maturity term.

If the account is closed before one year, the account holder receives the principal amount deposited but no interest.

If the account is closed prematurely after one year, but before two years, a deduction of 1.5 per cent of the deposit is made.

A 1% penalty on the deposit is imposed if the account is closed within two years.

Account Termination

A Senior Citizen Saving Scheme account matures five years from the day it is opened.

The account may be extended for another three years within one year of maturity. In such circumstances, the report may be cancelled after the one-year extension period has expired without incurring any deductions.

In the event of the person’s death before maturity or prolonged maturity, the account is closed. The nominee repaid the deposit with interest up to the account holder’s death date.


SCSS depositors benefit from Section 80C of the Income Tax Act, which permits them to classify their investment in the plan within the personal tax exemption limit of INR 1.5 lakh per year. If a person’s total Section 80 C investment for the year exceeds INR 1.5 lakh, they must pay taxes based on their direct tax band.

How to Create an SCSS Account

You may create an SCSS account in three easy steps.

Visit Your Account Opening Location

An approved bank or post office branch may establish an SCSS account.

The plan’s interest is credited immediately to the savings account opened by the bank for the scheme, which may be connected to the existing savings account upon request.

When a depositor creates an SCSS account via the Indian Post Office, they may obtain the history opening form online but must still physically visit the branch to deposit it.

The post office establishes a savings account for the depositor and handles the interest and deposit operations.

Documents Must Be Carried

The paperwork procedure is straightforward since the plan is geared toward elderly persons. Depositors must have:

Proof of Age: A PAN Card is required to open an SCSS.

Aadhaar Card will be accepted as proof of address.

Photographs of depositors serve as proof of identity.

Proof of Retirement: If you are retired personnel, you must provide a certificate of employment, a letter confirming if you have been freed from superannuation or VRS, and documentation on the disbursement of retirement benefits from your employer.

Send Your Application Form

Your application form may be obtained in person at a post office or a bank branch, or it can be downloaded online and submitted at your chosen location.

Before completing your form, understand the Senior Citizen Saving Scheme‘s terms and conditions.

Submit your application and the relevant documentation.

Get Your Passbook

After you open the account, you must get your passbook, which will include information such as:

  • Account opening date
  • Number of New Accounts Created
  • The amount placed in the account Information about the quarterly interest you will earn
  • The account’s maturity date
  • Details about your nominees or legal heirs, as appropriate


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