Should you invest in Senior Citizen Saving Scheme?

Senior Citizen Saving Scheme - Features and eligibiltyShould you invest in Senior Citizen Saving Scheme?


One of the pain area after retirement is identifying a good saving scheme to invest retirement money. While there are several ways you can invest your retirement amount, one of the best way is investing in Senior Citizen Saving Scheme. What is this Senior Citizen Saving Scheme all about? Who can invest in this scheme? Is there any penalty if you withdraw from Senior Citizen Saving Scheme ahead of maturity?

What is Sr Citizen Saving Scheme?


Senior Citizen Saving Scheme is a Govt. of India scheme aimed for Senior Citizens above 60 years. This scheme offers 9.3% interest per annum.  Since this is offered by Govt of India, this is one of the safest investment option for Senior Citizens in India.

Features of Senior Citizen Saving Scheme


  • Senior citizen who is eligible to open this scheme can open either individual level or at joint level along with their spouse.
  • Senior Citizen can open any number of accounts under this scheme with various banks in India. However the maximum investment amount overall should not exceed Rs 15 Lakhs.
  • Currently interest rate offered on this scheme is 9.3% per annum. Govt. of India can review this year on year like PPF interest rates and can alter the interest rates.
  • Interest is computed by end of every quarter and credited on last day of the quarter.
  • The tenure of this saving scheme is 5 years. Senior Citizens can extend this for 3 more years upon request.

Who is eligible to open Senior Citizens Saving Scheme in India?


Any of the following individuals can open this scheme.

  • Individual who attained 60 years and above can join this scheme.
  • Individuals who have attained 55 years or more but below 60 years, and who has retired, can open the account within a month of the date of receipt of the retirement benefits and proof of date of disbursal of such retirement benefit from employer.
  • Retired individuals from defence services can open this account with certain conditions without any age limit.
  • NRI cannot invest in this scheme.

How and where to open this Senior Citizen Saving account?


Government of India has approved for all nationalized banks, post office and ICICI Bank where you can open this scheme. ICICI Bank is the only private sector bank allowed to open this scheme.

What are the guidelines for pre-mature withdrawal?


  • You cannot withdraw within 1 year.
  • If one want to withdraw after one year, but before 2 years, 1.5% of the deposit amount would be deducted as penalty charges
  • If one want to withdraw after 2 years, but before maturity of 5 years, 1% of the deposit amount would be deducted as penalty charges.

What are the tax benefits available for Senior Citizen Saving Scheme?


Interest from this scheme is taxable. Senior citizens need to pay income tax on this interest as per income tax applicable to them. Banks would deduct TDS as per their rules ( (a) 10% if you submit PAN card and 20% with PAN card and (b) Zero tax if you submit Form 15H for senior citizen).

What is the process to open Senior Citizens Saving Citizen in India?


Eligible senior citizens need to approach the authorised bank or post office and fill the scheme application form and submit self attested age proof document along with receipt of disbursal proceeds which he/she would have received from his employer etc., Some of the valid age proof documents are Passport, DOB certificate, voter ID card, PAN card, Ration card, Driving license etc.,

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Senior Citizen Saving Scheme

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