The Senior Citizen Savings Scheme (SCSS) is a savings program available at the post office.
In this scheme, you need to deposit money for a period of 5 years.
You can start an SCSS account with a minimum of Rs 1,000, and you can invest up to Rs 30 lakh in it.
Interest Rates: SCSS vs. Bank FDs
The SCSS offers an interest rate of 8.2%. In comparison, the State Bank of India (SBI), the country’s largest bank,
offers senior citizens 7.50% interest on fixed deposits (FDs) for up to 3 years, 7.25% on 5-year FDs, and 7.50% on FDs lasting between 5 to 10 years.
This means that while the maximum interest rate for senior citizens at SBI is 7.50%, SCSS provides a higher interest rate of 8.2%.
Who Can Invest in SCSS?
Anyone aged 60 years or older can invest in the SCSS. Additionally, government employees in the civil sector who take voluntary retirement (VRS)
and those retiring from defense services may be allowed to invest at a younger age under certain conditions.
Tax Benefits and Extension Options
Investing in SCSS also offers tax benefits.
You can claim a tax exemption of up to Rs 1.5 lakh under Section 80C of the Income Tax Act.
Moreover, if you want to continue enjoying the benefits of this scheme after the initial 5 years, you can extend your account for an additional 3 years.
This extension must be done within 1 year of the account’s maturity, and the extended account will earn interest at the rate applicable at the time of maturity.
