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Senior Citizens Saving Scheme

This topic of “Senior Citizens Saving Scheme” is important from the perspective of the UPSC IAS Examination, which falls under General Studies Portion.


Senior Citizens Saving Scheme is a retirement benefit program by the Government of India. It provides an investment avenue for senior citizens over 60 years to earn a regular income after retirement.


Ministry of Finance

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To provide senior citizens with a safe investment option for their retirement savings and to ensure hassle-free disbursement of returns.


  • Hassle-Free Process: Individuals can open their accounts at any post office or authorized bank in India.
  • SCSS Tax Benefits: Under Section 80C of the Income Tax Act, the principal amount invested in this scheme is eligible for deduction up to a limit of ₹1.5 lakhs in a year. Furthermore, interest earned on SCSS is taxable according to an individual’s tax slab.
  • High-Interest Rate: SCSS offers an interest rate of 7.4% per year.
  • Assured Returns: The returns on this scheme are issued as it is a government-backed instrument.
  • Maturity Duration: SCSS comes with a maturity period of 5 years, which can be extended for another 3 years.
  • Deposit Limit: Individuals can deposit a minimum of ₹1,000 and a maximum of ₹15 lakh or the amount of retirement benefit, whichever is lower.
  • Account Closure: Deductions are made against premature withdrawals. If closed before a period of 2 years, 1.5% deduction will be made as a penalty. Furthermore, if closed after 2 years, 1% is deducted.
  • Quarterly Disbursals: One can expect quarterly disbursements against the deposited amount.
  • Nomination Option: The account holder can register a nominee to the Senior Citizens Saving Scheme.


  • Indian citizens above the age of 60 years
  • Retirees in the age bracket of 55-60 years who have opted for Voluntary Retirement Scheme (VRS) or Superannuation*
  • Retired defense personnel above 50 years and below 60 years of age* (*Investment must be made within a month of availing the retirement benefits.)


Hindu Undivided Family (HUFs) and Non-resident Indians (NRIs) are not eligible to invest in Senior Citizen Savings Scheme.

Implementation strategy:

  • Individuals can open their SCSS account at any post office or authorized bank in India by depositing a minimum of ₹1,000 within a month of receiving retirement benefits.
  • The scheme offers an assured interest rate of 7.4% per annum, with quarterly disbursements against the deposited amount.
  • The account can be extended for 3 more years after maturity, and a nominee can be registered.
  • The interest earned on SCSS is taxable as per an individual’s tax slab, and premature withdrawals are subject to a penalty.

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