The Senior Citizen Savings Scheme (SCSS) is a government-backed small savings programme designed exclusively for individuals aged 60 years and above. It was introduced in 2004 as a part of the Post Office Savings Scheme to provide financial security to senior citizens of India and help them receive a steady income after their retirement.

You can start investing in the SCSS scheme by opening an SCSS account with a post office or an authorised bank.

Below are the key features of the Senior Citizen Savings Scheme (SCSS):

Security of Investment

As the SCSS scheme is entirely backed by the Government of India, it offers unmatched safety and peace of mind. The amount you invest in it is virtually risk-free, making it one of the most secure retirement investment options available in India.

Guaranteed Returns at Maturity

By investing in the SCSS scheme, you can get guaranteed returns at maturity. Unlike market-linked schemes, you earn a fixed interest on your investments. Upon maturity, you get the principal amount along with the accrued interest.

Minimum and Maximum Deposit

You can open an SCSS account with a minimum one-time deposit of ₹1,000. The maximum investment amount can be Rs. 30 lakhs per individual. The amount must be in multiples of ₹1,000.

Mode of Investment

Cash deposits are allowed only if the investment amount does not exceed ₹1 lakh. For higher amounts, deposits must be made via cheques, Demand Drafts (DDs), or pay orders.

Maturity Terms

The initial maturity period for an SCSS account is five years (from the date of investment). However, upon maturity, you can extend your account for three more years by providing an application in writing. The application should be made within one year of the maturity date.

Number of Accounts

You can open multiple SCSS accounts, either individually or jointly with your spouse. However, the total deposits across all accounts must not exceed ₹30 lakhs. Also, you cannot open more than one account in the same branch during the same calendar month.

Nominee

Appointing a nominee is mandatory as per the SCSS rules. In the case of the death of the account holder before maturity, the nominee receives the lump sum upon maturity. You can appoint a nominee either while opening your account or after account opening.

Interest Rate and Payout Frequency

The Government of India determines the senior citizen saving scheme interest rate and revises it from time to time. The current SCSS interest rate is 8.2% per annum (as of mid-2025), fixed at the time of opening and paid quarterly. The interest is disbursed directly into the SCSS account on the first working day of April, July, October, and January.

Premature Closure

Premature closure of an SCSS account is permitted, albeit with certain penalties. If the account is closed within a year of opening, the interest paid in the account is deducted from the principal
amount.

If the account is closed after one year but within two years of opening, a penalty of 1.5% of the deposit is deducted. If the account is closed after two years but before maturity, a penalty of 1% of the deposit is levied. Multiple withdrawals from the same account aren’t permitted.

Account Transferability

SCSS accounts can be transferred seamlessly between post offices and authorised banks anywhere in India. Transfers are handled as continuing accounts, with documentation and balance forwarded to the new branch for uninterrupted benefits.

Below is the breakdown of the eligibility criteria for investing in the SCSS scheme:

• Indian citizens aged 60 years or older (at the time of account opening) are eligible to open and invest in an SCSS account. There is no time limit within which someone aged 60 or above must open an account after retirement.
• Individuals aged 55 to less than 60 years, who have formally retired via superannuation, voluntary retirement scheme (VRS), or special VRS, can also open an SCSS account. However, the account should be opened within a month of receiving retirement benefits.
• Retired defence services personnel, excluding civilian defence employees, are eligible to open an SCSS account from the age of 50 years, provided that other conditions are met.
• Non-Resident Indians (NRIs), Hindu Undivided Families (HUFs), and Persons of Indian Origin (PIOs) are not eligible to open SCSS accounts.
• Individuals can open an SCSS account individually or jointly with their spouses. However, in the case of joint accounts, the entire amount deposited will be attributed to the first account holder.
• From March 2023, PAN Card and Aadhaar Card have been made mandatory for opening SCSS accounts.

The SCSS scheme is a safe and tax-efficient option for senior citizens. However, the returns are not completely tax-free. Here’s a breakdown of the SCSS tax benefits and deductions:

• Deposits made in the SCSS scheme are available for tax deductions under section 80C of the Income Tax Act of 1961. The maximum deduction allowed in a financial year is ₹1.5 lakh.
• The interest earned on the deposited amount is taxable. If the annual interest exceeds ₹50,000, tax is deducted at source (TDS) unless you submit Form 15H.
• If the account holder is below the age of 60, TDS is deducted if the total annual interest exceeds ₹10,000.

The table below compares the SCSS scheme with other senior citizen investment avenues available in India:

As you can see in the above table, the SCSS emerges as one of the best retirement savings schemes for senior citizens in India. It clearly strikes a balance between high returns, capital safety, and flexibility.

Here’s a quick breakdown of how the SCSS scheme works:

• Step 1: Open an SCSS account

You can approach an authorised bank or a post office to open an SCSS account, provided that you fulfil the eligibility criteria for the same.

• Step 2: Make an investment

To open your SCSS account, you will need to make a one-time investment between ₹1,000 and ₹30 lakhs. To invest additional amounts, you can open multiple SCSS accounts. If the deposited amount exceeds the ceiling amount, it will be refunded to you.

• Step 3: Earn quarterly interest on your investments

You will start earning interest on your investments as per the prevailing senior citizen savings account interest rate. The current SCSS interest rate is 8.2% (payable quarterly). You will receive the payouts every three months directly into your SCSS account.

• Step 4: Receive a lump sum on maturity

The default maturity period for your SCSS account is five years. Upon maturity, you will receive a lump sum comprising the principal amount and the accrued interest. You can use an SCSS scheme calculator to determine the total amount you will receive on maturity.

You have an option to extend the maturity of your SCSS account by three years through a written application to the respective bank or post office. You must submit an application within a year of your account’s maturity date.

You can also withdraw prematurely from your SCSS account by paying a nominal penalty. If you withdraw within a year of account opening, the interest paid is forfeited. If you withdraw after one year but within two years of account opening, a penalty of 1.5% of the deposit is levied. If you withdraw after two years but before maturity, a penalty of 1% of the deposit is levied. Multiple withdrawals from the same account aren’t permitted.

To invest in the SCSS scheme, you will need to open an SCSS account. Below is the step-by-step procedure to open an SCSS account:

• Step 1: Visit the designated bank branch or a post office.

• Step 2: Fill out an SCSS account opening form and submit the required documents.

• Step 3: Determine the deposit amount and the mode of payment. If the deposit amount is less than ₹1 lakh, you can make a cash payment. For a higher amount, you can deposit through a cheque, DD, or pay order.

• Step 4: Nominate a beneficiary either at the time of account opening or after account opening.

• Step 5: The respective bank or post office will verify the details and open your SCSS account. The interest will start accruing immediately.

If your bank permits, you can also open an SCSS account online by visiting the bank’s website and filling out the SCSS account opening form. Post offices usually do not offer the facility of online account opening.

Documents Required to Open an SCSS Account

Below are the documents you will need to submit to open an SCSS account:

• Proof of Identity - Aadhaar, PAN, Passport, or Voter ID
• Proof of Age - PAN, Passport, Birth Certificate, or Voter ID
• Proof of Address - Utility bill, Aadhaar, Passport, or Voter ID
• Recent passport-sized photographs

Investing for retirement can be a tricky affair. You will need to select an instrument that can provide a perfect balance of high returns, capital safety, and flexibility. Being a government-backed scheme, the Senior Citizens Savings Scheme (SCSS) offers all these benefits. It empowers you to safeguard your savings, ensure a regular income, and lead a dignified life after retirement.

When planning for your retirement, merely thinking about financial freedom isn’t enough. If not planned, unforeseen medical expenses can derail your entire financial planning. That is why it is necessary to pair your investments in the SCSS scheme with a good Senior Citizen Health Insurance plan. It provides a safety net against the rising healthcare costs and ensures that you won’t have to empty your savings if you fall ill during your golden years.

With TATA AIG, you can compare health insurance plans to pick a plan that meets your budget and requirements and buy health insurance online within minutes.

With us, you can buy an online Health Insurance Policy with a gamut of features. Our health plans are tailor-made to cover astronomical healthcare costs associated with senior citizens and help them enjoy their retirement with complete peace of mind.