SCSS scheme is better than Bank FD in the case of return

Senior Citizen Savings Scheme (SCSS) is the preferred source of investment for retired people. This is also a regular source of income for retired people.

How to invest?

The account can be opened at the post office or in the bank. An elderly/senior person can invest in this scheme by opening a single (jointly) or joint account (with the spouse).

Who can invest?

  • A person of 60 years or more than that can invest in SCSS scheme.
  • A person retiring at age 55 to 60 through a voluntary retirement plan or general retirement can also take advantage of this scheme. The condition is that it will have to invest in this scheme within one month of getting the retirement benefit.
  • There is no age limit for those who retire from the army.
  • NRIs and Hindu Undivided Families (HUFs) are not allowed to invest in this scheme.

Investment limit

There is a maximum investment limit of Rs 15 lakh per person.

Documents required

  • The procedure of KYC is required to open an account under the documents required to open an account under the Senior Citizens Savings Scheme (SCSS).
  • The photo of the applicant will take place.
  • The identity and address proof must also be given.
  • The retired person has to give a certificate from his employer. It will include information about retirement, job posting, job duration, etc.
  • The applicant will also have to give the date for the retirement benefits information.


The duration of this scheme is 5 years which can be extended for 3 years. If one year after opening the account only, but before the completion of two years the money is withdrawn from the scheme, then 1.5% of the total deposit will be charged. After 2 years, after deducting money from the scheme, 1% charge will be given.

There is no charge to stop the account when the depositor dies.

Interest rate

The interest rate of SCSS has been kept at 8.3% in present. Calculation of interest is done every quarter. Before investing in this scheme, it is worth noting that if you want to open an account in this scheme through the post office, then you should have your Savings Account in the post office.


You can also make Nominee of your Senior Citizen Saving Scheme Account at any time or after opening the account. Nominee, already registered, can also be renamed if needed. The nominee can be made even if you have a Joint Account. But, in the event of the death of the first applicant, the first right on the money deposited in the account will be of the other Joint Account Holder.

Tax rules

Investment in SCSS allows for deduction under Section 80C of the Income-tax (I-T) Act. However, an investment limit of Rs 1.5 lakh will be applied to a tax benefit for Section 80C on tax benefit. Tax Benefit under Section 80C is available in that financial year, in which money is deposited in this scheme. Only one deposit is allowed in an SCSS account.

Prior to the withdrawal of money from this scheme, the benefit under Section 80C is eliminated.

There is no tax on money withdrawn from the scheme before the time of the nominee or his heirs when the depositor dies. After the death of the depositor, the nominee or his heir should be taxed on the amount of interest in the account. TDS is provided if the interest amount is more than Rs. 10,000/-.

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