Senior Citizen Savings Scheme (SCSS): Interest Rates, Benefits, & How to Invest

The Senior Citizen Savings Scheme (SCSS) was established to provide a steady income to retirees through assured returns on deposits made into the account. An SCSS account is not like a regular savings account because it allows limited number of deposits and investments, but you know exactly what your returns will be since the interest rate is fixed. Another important feature of SCSS is that the government reviews the SCSS interest rates every quarter and if necessary the rate is adjusted according to market trends.

Below are the key eligibility criteria for individuals who want to open a Senior Citizen Savings Scheme account with a designated bank or post office:

• Age Requirement: Individuals aged 60 years or above can invest in SCSS.
• Early Retirement Clause: Individuals aged 55 years to less than 60 years are allowed to open a SCSS account if they have retired under voluntary retirement scheme (VRS) or superannuation. However, in such cases, the SCSS account has to be opened within 1 month of receipt of retirement benefits.
• Defence Personnel: Retired defence employees can invest if they have attained the age of 50 years at the time of account opening, provided they meet all other specified conditions.
• Residential Status: Only Indian residents and individuals (solely or jointly) are eligible to open a SCSS account. As per current rules, NRIs and HUFs are not eligible.
• Single or Joint Account: SCSS account can be opened individually or jointly with a spouse. In case of joint operation, the spouse can only as a secondary holder of the account. In such cases, the age of the primary applicant needs to fulfill the eligibility criteria and the age of secondary holder will not have any bearing on eligibility for account opening.

It should also be noted that current rules allow individuals to open and operate multiple SCSS accounts, however, the total balance across all SCSS accounts held by the individual cannot exceed Rs. 30 lakh.

Here is a list of the key steps you need to complete for opening an SCSS account:

Step 1: Choose a Bank or Post Office

Visit an authorised bank or post office offering the SCSS facility. Currently, most India Post branches and leading Public-sector banks in India are allowed to offer SCSS accounts. So do check whether your preferred bank offer this facility.

Step 1: Choose a Bank or Post Office

Visit an authorised bank or post office offering the SCSS facility. Currently, most India Post branches and leading Public-sector banks in India are allowed to offer SCSS accounts. So do check whether your preferred bank offer this facility.

Step 2: Collect and Fill the Application Form

Obtain the SCSS account opening form, which is available online or at the branch, and fill in the required details. Do ensure that you fulfill all the eligibility criteria required for opening a SCSS account to avoid rejection of your application.

Step 3: Submit Required Documents

Provide copies of key KYC documents, such as:

• Identity proof (Aadhaar, Driving License, etc.)
• PAN Card copy
• Address proof such as Aadhaar, Voter ID, etc.
• Age proof documents such as (Birth certificate, Passport, Voter ID, or Aadhaar)
• Retirement proof (for those between 55 and 60 years)

The above list of documents required is illustrative only. Additional documents that might be required at the time of opening a SCSS account include documentary proof of disbursal of retirement benefits, proof of source of funds for deposit into the account, or other documents on a case by case basis.

Step 4: Make the Initial Account Deposit

Deposit a minimum amount of ₹1,000 at the time of account opening. The maximum deposit currently allowed in a SCSS account is ₹30 lakh. However, if you have multiple SCSS accounts, do ensure that the total balance across all your SCSS accounts does not exceed ₹30 lakh.

Step 5: Receive the Account Passbook

Visit an authorised bank or post office offering the SCSS facility. Currently, most India Post branches and leading Public-sector banks in India are allowed to offer SCSS accounts. So do check whether your preferred bank offer this facility.

Upon successful verification, the SCSS account is opened, and you receive a passbook with details of your account such as current balance, account opening date, maturity date, etc.

Note: The above steps are illustrative in nature and may vary to some extend depending on the bank/post office you are planning to open your account with.

The amount you deposit in a SCSS account is eligible for tax deductions of up to ₹1.5 Lakh annually under Section 80C. However, this feature is not applicable to those who choose to file tax returns under the new tax regime.

Additionally, the interest earned from a SCSS account is taxable as per current rules. However, this is not subject to TDS provided the interest earned does not exceed the threshold of ₹50,000 annually.

You can currently open a SCSS account by going to your bank, applying online, or visiting a post office. A number of banks let you apply for a SCSS account online through their mobile apps which can be quite convenient. However, even then, it might be necessary for the applicant to visit the branch in person to get the process completed and receive the passbook.

That said, if you’re choosing the post office route, just know that you’ll need to go visit the Post Office in person. You can grab the SCSS application form from the India Post website. Just print it out, fill it in, and drop it off at your local post office along with the required documents.

There are multiple options available for senior citizens to start their investments and financially secure their post-retirement life. Each of these has different features, perks, and drawbacks:

Note: Interest rates offered by the above mentioned instruments are as of April 2025 and subject to periodic change.

A number of recent changes to the Senior Citizens Savings Scheme (SCSS) have made it more attractive for eligible senior citizen applicants.

• If you are between the ages of 55 and 60 when you retire, you now have a longer window, up to 3 months, to open an SCSS account. Previously, you had only 1 month to open your account, so that means more flexibility.
• The maximum account limit has doubled, meaning that you can now have up to ₹30 lakh in one or more SCSS account (increased from earlier limit of ₹15 lakh). Additionally, if you and your spouse are both eligible, you can each open your own account with up to ₹30 lakh deposited in each account.
• For the April to July 2025 period, SCSS interest rate is 8.2% p.a. which is an increase from 8.0% interest rate applicable during the earlier period.

Suppose you are a senior citizen who has opened an SCSS account to save for retirement. While you would want to keep the deposit intact till maturity, supposed you need to make a withdrawal in the case of an emergency. That's when you can make a premature withdrawal. But there are a few things you need to be aware of when it comes to making premature withdrawals from your SCSS account:

• If your withdraw from your SCSS account before completion of 1 year from the date of account opening, you will receive the principal amount back less any interest that has already been paid out. If the withdrawal is made after completion of 1 year but before completion of 2 years, a 1.5% penalty is applicable on the principal amount deposited. If the withdrawal is made after completion of 2 years, a 1% penalty on principal amount is applicable.
• You cannot take partial withdrawals from SCSS accounts. Withdrawing prematurely would lead to the account being closed completely.
• The SCSS account matures after 5 years. After maturity, you can withdraw the principal plus interest accrued or extend the account for another 3 years.
• If you do not withdraw, your SCSS account will automatically be extended for 3 years after the initial 5-year term.
• In case of the account holder's unfortunate death, the nominee can close the account or transfer the funds to their account.

The Indian government has recently amended the rule of extending maturity of SCSS accounts. Earlier, after completion of the initial 5-year lock-in, the SCSS account could only be extended for a single period of 3 years. This is no longer the case and as per current rules, multiple extensions are allowed in three-year blocks post completion of the initial 5-years lock-in. This helps ensure that senior citizens would have the option of availing the benefits of a SCSS account for an extended period of time.

To apply for an extension of your SCSS account, you will need to submit a request form within a year of maturity or at the end of each three-year block. Please note—this option is only available in the case of SCSS accounts that have completed the initial 5 year lock-in period.