Senior citizens saving scheme (SCSS) is a government scheme offered to Indian citizens aged above 60 years. The scheme offers guaranteed interest payment, which can be received on a quarterly basis. The idea behind this scheme is to provide senior citizens with a steady and secure source of income in their post-retirement phase. This account can be opened at any bank or post office and the deposit matures after 5 years, but can be extended up to 8 years. This extension option is currently available just once and the extension request has to be made within 1 year of maturity.
As of the first quarter (April to June, 2020), the interest rate available on the savings scheme account is 7.4 per cent per annum. This rate of interest is reviewed quarterly by the government and is subject to periodic change.
Senior citizens can open the account with a minimum deposit of Rs 1,000. The maximum deposit limit is Rs15 lakh. Deposits greater than Rs 1,000 should have to be made in multiples of one thousand rupees. The account can be opened in individual capacity, or jointly with spouse and he or she may operate more than one account.
In order to avail this saving scheme,
- An individual should have attained the age of 60 years and above.
- A citizen who has attained the age of 55 years or more but less than 60 years and who has retired under superannuation or Voluntary retirement rules.
- The retired staff of Defence services who attained the age of 50 years are eligible to open the account.
Premature closure the scheme is permitted any time but with a penalty. If the account is closed before one year, no interest will be payable to the customer, if paid already, it will be recovered. After one year, an amount equal to 1.5 per cent of the deposit will be deducted. After two years, 1 per cent of the deposit will be deducted.