The Senior Citizen Savings Scheme (SCSS) account is sometimes confused with a savings account for senior citizens. SCSS is like a fixed deposit account, opened only for one time when you subscribe to it. Retirees who want to invest the retirement benefits in a lump sum may find it useful. SCSS allows deposits up to Rs 30 lakh in a lump sum, increased from Rs 15 lakh earlier. Currently, Senior Citizen Savings Scheme (SCSS) offers 8.2 percent of return annually.

Unlike the National Pension System (NPS), SCSS is only for resident Indians. Non-resident Indians (NRIs) and Hindu Undivided Families (HUF) are not eligible. If you are looking for a regular, guaranteed cash flow, you may open an SCSS account with a post office or a bank.

Senior Citizen Savings Account (SCSS): Resident Indians aged 60 and older can open the account either individually or jointly with a spouse. Those aged 50 but less than 60, such as retired defense personnel, can also open the account within three months of receiving their retirement benefits. The minimum investment is Rs 1,000, and the maximum is Rs 30 lakh. One person can open more than one account, but the deposits should not exceed the maximum limit.

SCSS offers 8.2 percent annually as a regular, guaranteed return. It offers tax benefits up to Rs 1.5 lakh in a financial year under Section 80C of the Income-tax Act, 1961. The interest paid quarterly to the investor is taxable. Tax deducted at source (TDS) will apply if the interest amount is more than Rs 50,000 in a financial year. However, you can avoid TDS by submitting Form 15H to the bank or the post office where you have the account.

The SCSS account has a five-year lock-in, but it can be extended in blocks of three years after maturity for an unlimited number of times. The prevailing interest rate will apply on renewals.

Also Read: Here Is How SCSS Can Help Build Regular Cash Flow

How To Open An SCSS Account? 

The process to open an SCSS account is simple. You can choose to open the account at a bank branch where you have a savings account, or at a post office or any other bank.

•  Visit the bank or post office where you want to open the account.
• Fill out the account opening form and submit the Know Your Customer (KYC) documents, like a PAN card, an Aadhaar card, and a passport-size photo.
• Sign the form and self-attest the KYC documents.
• Nominate one or more people. However, you can change or cancel the nomination later, as per the State Bank of India website.
• After that, deposit the money in the account.

Although the deposits in the account are returned after maturity, premature withdrawals are allowed, subject to certain conditions.