Senior Citizen Saving Scheme (SCSS) allows eligible individuals to earn interest on their investments with a potential strategy from 1st September 2025 onwards.
Who can apply for SCSS?
Senior Citizen Saving Scheme (SCSS) is applicable for:
- Age above 60 years
- Resident Individuals
- Civilian Defence Employees Age Between 55 - 60 years
- Retired Defence Employees Age above 50 years - retirement benefits can invest in SCSS within three months of receiving these benefits.
Other Eligibility - Spouse of Government Employee
Spouse of Government Employee are now allowed to open Senior Citizen Saving Scheme account but with certain condition:
- Government Employee including Central or State Government age 50 years or more.
- Died in harness.
- Eligible for retirement benefits or death compensation.
Accounts opened individually or Jointly with spouse, the whole deposit belongs to first account holder only.
Eligible Retirement Benefits for Investment
Individuals who have received specific retirement benefits can invest in SCSS within three months of receiving these benefits.
Eligible retirement benefits include:
- Provident Fund
- Retirement Superannuation Fund
- Death Gratuity
- Commuted Pension (lump sum)
- Cash Equivalent Leave
- Saving Element Related to Group Saving Link Insurance Scheme
- Retirement Cum Withdrawal Benefit under Employee Family Pension Scheme
- Ex-gratia or Payment under Voluntary Scheme / Special Voluntary Retirement Scheme
- Newly added: Retirement benefits received by the spouse of an employee who died in harness, provided the employee was 50+ years old.
Deposit Limits
- Minimum deposit is ₹1,000, and subsequent deposits must be in multiples of ₹1,000.
- Maximum deposit is ₹30,00,000
- If both spouses open separate accounts, the combined maximum deposit is ₹60 lakhs (₹30 lakhs each).
- For a joint account opened by self and spouse, the maximum deposit remains ₹30 lakhs.
Tax Benefits
Investments up to ₹1.5 lakhs in SCSS qualify for a deduction u/s 80C of the Income Tax Act under the old tax regime.
Tax Deducted at Source
TDS will be deducted automatically if:
- The total interest you earn in a year exceeds Rs.1,00,000 and
- You have not submitted Form 15H or Form 15G
Interest Rate and Payments
- The interest rate for SCSS is 8.2% per annum, which is payable on quarterly basis
- Auto-credit and ECS facilities are available for transferring interest to the saving account.
- No additional interest is paid if quarterly interest is not claimed and remains in the SCSS account.
Due Date For Interest Payment
The due dates for interest payment are:
- 31st March - credited on 1st April
- 30th June - credited on 1st July
- 30th September - credited on 1st October
- 31st December - credited on 1st January
Unclaimed Interest
If you do not withdraw or claim the interest in a quarter, the interest amount will stay as it is your SCSS account.
However, it will not earn any additional interest.
Premature Closure of SCSS Account
Penalties apply if an SCSS account is closed before its 5-year maturity period.
| Period of Closure | Penalty |
| Before 1 year | No interest paid |
| After 1 year but before 2 years | 1.5% of the deposit amount deducted |
| After 2 years but before 5 years | 1% of the deposit amount deducted |
| Before 1 year of extension | 1% of the deposit amount deducted |
Extension of Account
After 5 years, the account holder can extend the SCSS account for another 3 years.
This extension can be done any number of times - every time for a block of 3 years.
Time limit To Appy For Extension
The extension request must be submitted within 1 year from the date of maturity.
How to Earn more Interest from SCSS?
This strategy involves combining SCSS with a Recurring Deposit (RD) to achieve an effective interest rate over 5 years.
Investment Breakdown
- Invest ₹30 lakhs in SCSS at 8.2% for 5 years.
- Every years, you may received interest amounting ₹246000 Approx.
- If you invest this (246000/12) = 20500 monthly in RD scheme currently at 6.7% for 5 years.
- The RD scheme will generate an additional interest.
- Combine SCSS and RD interest totals over 5 years.
And you will see that a higher effective return on SCSS investments.
Click here to know more - Senior Citizen Saving Scheme For The FY 2025-26
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