Senior Citizen Saving Scheme (SCSS) is a government-backed savings scheme available in India specifically designed for senior citizens. It is aimed at providing financial security and regular income to individuals aged 60 years and above.
Here are some key features of the Senior Citizen Saving Scheme:
- Eligibility: Individuals who are 60 years or above can open an account. People who have opted for VRS and are 55 years of age are also eligible.
- Tenure: The SCSS has a fixed tenure of 5 years, which can be extended by an additional 3 years once the initial 5-year period expires.
- Account Type: The scheme can be opened individually or jointly, with a spouse. Joint accounts can only be opened with a spouse, and the first depositor is the primary account holder.
- Investment Limit: The maximum amount that can be invested is ₹30 lakh. This limit applies per individual, so if senior citizens have 2 accounts jointly held with spouses, total amount deposited can be ₹60 lakhs.
- Interest Rate: The interest rate is set by the government and is revised periodically. As of June 2023, the interest rate was 8.2% per annum, payable quarterly.
- Premature Withdrawal: Premature withdrawals are allowed after the completion of one year, subject to certain conditions. There are penalties for early withdrawals, such as a deduction of 1.5% of the deposit amount if withdrawn between 1 to 2 years, and 1% if withdrawn after 2 years and before 5 years.
- Tax Benefits: Investments made in the SCSS are eligible for tax deductions under Section 80C, up to a maximum of ₹1.5 lakh in a year.
- Extension: After the maturity of the scheme, the account can be extended for an additional 3 years, but the account holder needs to give written consent for the extension.
