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As name itself suggests, this scheme is only for the senior citizens. The account may be opened by an individual, who has attained age of 60 years or above on the date of opening of the account. The account may also be opened by those who has attained the age 55 years or more but less than 60 years and has retired under a Voluntary Retirement Scheme or a Special Voluntary Retirement Scheme on the date of opening of the account or  within three months from the date of retirement. The retired personnel of Defence Services (excluding Civilian Defence Employees) will be eligible to invest irrespective of the age limits subject to the fulfillment of other specified conditions.

The account may be opened in individual capacity or jointly with spouse. Non-resident Indians (NRIs) and Hindu Undivided Family (HUF) are not eligible to open an account.

1. What are the salient features of the Senior Citizens Savings Scheme, 2004?

The salient features of the Senior Citizens Savings Scheme, 2004 are given below.

Tenure of the deposit account 5 years, which can be extended by 3 years.
Rate of interest 9.3 per cent per annum
Frequency of computing interest Quarterly
Taxability Interest is fully taxable.
Whether TDS is applicable Yes. Tax will be deducted at source.
Investment to be in multiples of `1000/-
Maximum investment limit ` 15 lakh

Minimum eligible age for investment

60 years (55 years for those who have retired on superannuation or under a voluntary or special voluntary scheme). The retired personnel of Defence Services (excluding Civilian Defence Employees) will be eligible to invest irrespective of the age limits subject to the fulfillment of other specified conditions

Premature closure/withdrawal facility Permitted after one year of opening the account but with penalty.
Transferability Not transferable
Tradability Not tradable
Nomination facility Nomination facility is available.
Modes of holding

Accounts can be held both in single and joint holding modes. Joint holding is allowed only with spouse.

Application forms available with

Post Offices and designated branches of 24 Nationalised banks and one private sector bank

Applicability to NRI, PIO and HUFs

Non Resident Indians (NRIs), Persons of Indian Origin (PIO) and Hindu Undivided Family (HUF) are not eligible to open an account under the Scheme.

Transfer from one deposit office to another

Transfer of account from one deposit office to another is permitted.

2. Can a joint account be opened under the scheme with any person?

Joint account under the SCSS, 2004 can be opened only with the spouse. [Rule 3 (3)]

3. What should be the age of the spouse in case of a joint account?

In case of a joint account, the age of the first applicant / depositor is the only factor to decide the eligibility to invest under the scheme. There is no age bar/limit for the second applicant / joint holder (i.e. spouse). [Rule 3 (3)]

4. What will be the share of the joint account holder in the deposit in an account?

The whole amount of investment in an account under the scheme is attributed to the first applicant / depositor only. As such, the question of any share of the second applicant / joint account holder (i.e. spouse) in the deposit account does not arise. [Rule 3 (3)]

5. Whether both the spouses can open separate accounts in their individual capacity with separate limit of Rs.15 lakh for each of them?

Both the spouses can open individual and / or joint accounts with each other with the maximum deposits up to Rs.15 lakh each, provided both are individually eligible to invest under relevant provisions of the Rules governing the Scheme. (Rules 3 and 4 )

6. Whether any income tax rebate / exemption is admissible?

No income tax / wealth tax rebate is admissible under the Scheme. The prevailing Income Tax provisions shall apply. (GOI letter F. No.2/8/2004/NS-II dated October 13, 2004)

7. Is TDS applicable to the scheme?

Yes, TDS is applicable to the Scheme as interest payments have not been exempted from deduction of tax at source. (GOI letter F. No.2/8/2004/NS-II dated March 28, 2006)

8. Whether any minimum limit has been prescribed for deduction of tax at source?

Tax is to be deducted at source as per the minimum limit prescribed by the Government.

9. What is the rate at which TDS is to be deducted from the account holder?

The rate for TDS for a financial year is specified in Part II of Schedule I of the Finance Act for that year. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)

10. Whether TDS should also be recovered from the undrawn interest payable to the legal heirs of the deceased depositors?

Tax shall be deducted at source even from any interest paid / payable to the legal heir of the account holder. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)

11. Whether TDS on interest payments will be applicable with retrospective effect or prospective basis?

TDS is applicable from the very first day when SCSS, 2004 was made operational regardless of the fact that the Central Government or Reserve Bank of India or any authority might have issued any Notification / circular / clarification at a later stage. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)

12. Whether only one person or number of persons can be nominated in the accounts opened under the Scheme?

The depositor may, at the time of opening of the account, nominate a person or persons who, in the event of death of the depositor, will be entitled to payment due on the account. [Rule 6 (1)]

13. Can a nomination be made after the account has already been opened?

Yes, nomination may be made by the depositor at any time after opening of the account but before its closure, by an application in Form C accompanied by the Pass book to the deposit office. [Rule 6 (2)]

14. Can a nomination be cancelled or changed?

Yes, the nomination made by the depositor may be cancelled or varied by submitting a fresh nomination in Form C to the deposit office where the account is being maintained. [Rule 6 (3)]

15. Can nomination be made in joint account also?

Nomination can be made in joint account also. In such a case, the joint holder will be the first person entitled to receive the amount payable in the event of death of the depositor. The nominee’s claim will arise only after the death of both the joint holders. [Rule 6 (4)]

16. Can a person holding a Power of Attorney sign for the nominee in the nomination form ?

No, a person holding a Power of Attorney cannot sign for the nominee in the nomination form. (GOI letter No. F.15/8/2005/NS-II dated March 02, 2006)

17. In case of a joint account, if the first holder / depositor expires before maturity, can the account be continued?

In case of a joint account, if the first holder / depositor expires before the maturity of the account, the spouse may continue the account on the same terms and conditions as specified under the SCSS Rules. However, if the second holder i.e. spouse has his / her own individual account, the aggregate of his/her individual account and the deposit amount in the joint account of the deceased spouse should not be more than the prescribed maximum limit. In case the maximum limit is breached, then the remaining amount shall be refunded, so that the aggregate of the individual account and deceased spouse’s joint account is maintained at the maximum limit. [Rules 6 (4) and 8 (3)]

18. What happens to the accounts if both the spouses are maintaining individual accounts and not any joint account and one of them expires?

If both the spouses have opened separate accounts under the scheme and either of the spouses dies during the currency of the account(s), the account(s) standing in the name of the deceased depositor/spouse shall not be continued and such account(s) shall be closed. The account can be closed by making an application in Form ‘F’. Annexures II & III to Form ‘F’ can be attested by the Oath Commissioner or Notary Public [Rule 8].

19. Whether any fee has been prescribed for nomination and / or change / cancellation of nomination?

No fee has been prescribed for nomination and / or change / cancellation of nomination(s) in the accounts under the SCSS, 2004. (GOI letter F. No.2/8/2004/NS-II dated October 13, 2004)

20. What is the age limit in the case of retired Defence Personnel for investment in the scheme?

The retired personnel of Defence Services (excluding Civilian Defence Employees) will be eligible to subscribe under the scheme irrespective of the age limit of 60 years subject to the fulfillment of other specified conditions. (The Senior Citizens Savings Scheme (Amendment) Rules, 2004 notified on October 27, 2004)

21. What is the meaning of ‘retirement benefits’ for the purpose of SCSS, 2004?

“Retirement benefits” for the purpose of SCSS Rules have been defined as ‘any payment due to the depositor on account of retirement whether on superannuation or otherwise and includes Provident Fund dues, retirement / superannuation gratuity, commuted value of pension, cash equivalent of leave, savings element of Group Savings linked Insurance scheme payable by employer to the employee on retirement, retirement-cum-withdrawal benefit under the Employees’ Family Pension Scheme and ex-gratia payments under a voluntary retirement scheme’. (Rule 2 (a) of the Senior Citizens Savings Scheme (Amendment) Rules, 2004 notified on October 27, 2004)

22. Can deposits under the SCSS scheme be made only from amounts received as retirements benefits?

In case an investor has attained the age of 60 years and above, the source of amount being invested is immaterial [Rule 2 (d)(i)]. However, if the investor is 55 years or above but below 60 years and has retired under a voluntary scheme or a special voluntary scheme or has retired from the Defence services, only the retirement benefits can be invested in the SCSS. [Rule 2(d) (ii)].

23. Is there a period prescribed for opening deposit account under the SCSS scheme, by the senior citizen, from the retirement benefits?

If the investor is 60 years and above, there is no time period prescribed for opening the SCSS account(s). However for those below 60 years, following time limits have been prescribed.

(a) the persons who have attained the age of 55 years or more but less than 60 years and who retired under a voluntary retirement scheme or a special voluntary retirement scheme on the date of opening of an account under these rules, subject to the condition that the account is opened by such individual within three months of the date of retirement.

(b) the persons who have retired at any time before the commencement of these rules and attained the age of 55 years or more on the date of opening of an account under these rules, will also be eligible to subscribe under the scheme within a period of one month of the date of the notification of the SCSS, 2004 i.e. 27th October 2004, subject to fulfillment of other conditions. [Rule 2 of the Senior Citizens Savings Scheme (Amendment) Rules, 2004]

(c) the retired personnel of Defence Services (excluding Civilian Defence Employees) will be eligible to subscribe under the scheme irrespective of the above age limits subject to the fulfillment of other specified conditions. [Rule 2 of the Senior Citizens Savings Scheme (Amendment ) Rules, 2004]

24. Can an account holder obtain loan by pledging the deposit / account under the SCSS, 2004?

The facility of pledging the deposit / account under the SCSS, 2004 for obtaining loans, is not permitted since the account holder will not be able to withdraw the interest amount periodically, defeating the very purpose of the scheme. (GOI letter F. No.2/8/2004/NS-II dated May 31, 2005)

25. Is premature withdrawal of the deposits from the accounts under the SCSS, 2004 permitted?

Premature withdrawal / closure of the deposits from the accounts under the SCSS, 2004 has been permitted after completion of one year from the date of opening of the account after deducting the penalty amount as given below.

(i) If the account is closed after one year but before expiry of two years from the date of opening of the account, an amount equal to one and half per cent of the deposit shall be deducted.

(ii) If the account is closed on or after the expiry of two years from the date of opening of the account, an amount equal to one per cent of the deposit shall be deducted.

However, if the depositor is availing the facility of extension of account under Rule 4 (3), then he/she can withdraw the deposit and close the account at any time after the expiry of one year from the date of extension of the account without any deduction. [Rule 9 (1) (a) (b) and (2)]

26. Are Non-resident Indians, Persons of Indian Origin and Hindu Undivided Family eligible to invest in the SCSS, 2004?

Non resident Indians (NRIs), Persons of Indian Origin (PIO) and Hindu Undivided Family (HUF) are not eligible to invest in the accounts under the SCSS, 2004. If a depositor becomes a Non-resident Indian subsequent to his/her opening the account and during the currency of the account under the SCSS Rules, the account may be allowed to continue till maturity, on a non-repatriation basis and the account will be marked as a Non-Resident account. [Rule 13 and GOI letter F.No.2/8/2004/NS-II dated June 19, 2006)

27. Can an account be transferred from one deposit office to another?

A depositor may apply in Form G, enclosing the Pass Book thereto, for transfer of his account from one deposit office to another. If the deposit amount is rupees one lakh or above, a transfer fee of rupees five per lakh of deposit for the first transfer and rupees ten per lakh of deposit for the second and subsequent transfers shall be payable. [Rule 11 and GOI Notification GSR.(E) dated March 23, 2006)

28. Can an SCSS account be extended?

A depositor may extend the account for a further period of three years by making an application to the deposit office within a period of one year after maturity.

29. Does an account, which is not extended on maturity, earn any interest?

In case a depositor does not close the account on maturity and also does not extend the account, the account will be treated as matured and the depositor will be entitled to close the account at any time subject to the condition that the post maturity interest at the rate as applicable to the deposits under the Post office Savings Accounts from time to time will be payable on such matured deposits upto the end of the month preceding the month of the closure of the account.

30. What happens if an account is opened in contravention of the SCSS Rules?

If an account has been opened in contravention of the SCSS Rules, the account shall be closed immediately and the deposit in the account, after deduction of the interest, if any, paid on such deposit, shall be refunded to the depositor. (Rule 12)

31. Whether commission is payable to the agents under the Scheme?

Payment of commission on the Scheme has been discontinued w.e.f. December 1, 2011 (Government of India Notification dated November 25, 2011).

32. Which are the banks authorized to open an account under the SCSS, 2004?

At present, 24 Nationalized banks and one private sector bank, as per list below, are authorized to handle the SCSS, 2004. It may be noted that only designated branches of these banks have been authorized to handle SCSS, 2004.

  1. State Bank of India
  2. State Bank of Hyderabad
  3. State Bank of Bikaner and Jaipur
  4. State Bank of Patiala
  5. State Bank of Mysore
  6. State Bank of Travancore
  7. Allahabad Bank
  8. Andhra bank
  9. Bank of Baroda
  10. Bank of India
  11. Bank of Maharashtra
  12. Canara Bank
  13. Central Bank of India
  14. Corporation Bank
  15. Dena Bank
  16. Indian Bank
  17. Indian Overseas Bank
  18. Punjab National Bank
  19. Syndicate Bank
  20. UCO Bank
  21. Union Bank of India
  22. United Bank of India
  23. Vijaya Bank
  24. IDBI Bank
  25. ICICI Bank Ltd.

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38 Comments

  1. Devyani Deshpande says:

    Myself has left/resigned the job at the age of 56 years from a Scheduled cop Bank. Can I invest The gratuity amount received in this scheme SCSS?

  2. VIRENDRA PAREKH says:

    Sir, I wish to know whether the investment in SCSS can be made in Post Office as well as in nationalized bank at the same time separately. by the same eligible applicant . i.e. Two investments in SCSS.
    Thanking you,
    Virendra.

  3. Dharmesh Azad says:

    I have deposited Rs.15 lacs in senior citizen saving scheme 2004 and received quarterly interest in my saving ac.i have just completed one year.now I m premature the account .
    Please calculate the remaining balance how much? Kindly advise me as per calculation.

  4. Chatura Nand Dwivedi says:

    Sir, on 04 Apr 2016 I opened SCSS account when interest rate was 9.3%. After 5 years, I extended it for the three years. On extension bank has reduced interest rate to 7.4%. Is it correct? In my opinion, I should get interest rate of 9.3%. Please guide me in this regard.
    Secondary If the chance of interest rate is correct, can I get tax benefit under section 80c, this financial year.

    Please guide me

  5. Girish Masand says:

    My father has Senior Citizen Savings account 2004. He has nominated me. Incase he dies before maturity of this scheme, will the nominee get the principal amount and interest amount without penalty if nominee wishes to close this ? Union Bank people told that penalty will be charged it account is closed closed even after death of the account holder. I don’t think this is correct. Penalty cannot be charged if someone dies. Please comment. Girish : gtmasand@gmail.com

  6. Kajal Kanjilal says:

    Dear sir,
    I was retired from BSNL service on 31.01.2020 under VRS-2019 scheme.My present age is below 55 years.( 05 months less) . Please intimate me whether I am eligible to opening an account under Senior citizen scheme -2004.
    Thanking you

    K.Kanjilal

  7. PROBIR CHAND BYSACK says:

    I holding Senior Citizen Scheme 2004 of U.B.I Baghbazar Br. due to Change of IFSCode, Now New IFSCode is PUNB0009020 & MICR Code is 700024177 , I am not receiving any Interest from Senior Citizen Scheme 2004, therefor Please look into matter that I may receive the Interest as early as possible hope you will give reply of my request

  8. PROBIR CHAND BYSACK says:

    I holding Senior Citizen Scheme 2004 of U.B.I Baghbazar Br. due to Change of IFSCode, Now New IFSCode is PUNB0009020 & MICR Code is 700024177 , I am not receiving any Interest from Senior Citizen Scheme 2004, therefor Please look into matter that I am received the Interest as early as possible hope you will give reply of my request

  9. PROBIR CHAND BYSACK says:

    U.B.I BAGHBAZAR BR.Senior Citizen Saving 2004 as UBI iFSCode change to PUNB0009020,MICR-700024177 so I am receiving any interest from Senior Citizen Saving

  10. Pinesh Jain says:

    Dear sir, I want to open a senior citizen saving scheme account at state bank of india, But I want the quarterly interest paid under this scheme to be credited in my kotak mahindra banks saving account. Please let me know if it is possible or not.

  11. Ashok Dalal says:

    sirji,
    PMVVY LiC, and SCSS
    Both limit 15 lacs, both r different or same
    Eg:- A Invest PMVVY 15 lacs
    And Further he wants to invest in
    SCSS ,15 lacs also same name
    Is it possible..pls confusion,pls request to guide me

  12. I.C.Agarwal says:

    I had opened SCSS a/c with SBI, Allahabad depositing total of Rs.15 lakhs under three a/cs in 20017. My one a/ c for 4.5 lakhs matured on 30.5.2020 and was automatically extented till 31.5.2022.
    But bank is refusing to extend other two a/cs maturing on 20.7.17 and on 20.12.20..
    Bank is insistiing to withdraw and again open fresh a/cs with them with new terms

    I feel it is not fare. They should allow me extension for further 2 years on old terms of 2004.
    Please advice me what action I can take.
    Your early detailed reply and help is solicited by a 89 yrs Sr.citizen
    Tks.

  13. S.L.N.Sastry says:

    Can husband and wife open this account each for a maxi;mum amount of Rs.15 lakhs though the wife is not retired from any service, She is only a house wife

  14. Rajendra Sharma says:

    In banks Up 5 lakh insuranced .
    Additional 15 lakh of SCSS amount insuranced or not, who’s responsible for repayment if bank diwaliya

  15. rn awasthi says:

    I opened two accounts by mistake in two different backs under SCSS and within few months intimated the bank concerned where the 2nd account was opened by mistake. How could I get it closed at the earliest and what kind of penalty shall be levied upon me for the error.

  16. K K DE says:

    My wife , Smt Arati Dey opened SCSS account with SBI , Bhupen Bose Avenue Branch on 30.102015 ( A/c no. ###########) for Rs 2,00,000/-. The said account was transferred to Baghbazar Branch of SBI after merger.

    On finding no interest transfer to SB account after 30.10.2018, I made an enquiry to Baghbazar Branch on 16.05.2019 and was surprised to learn that the account was closed on maturity on 30.10.2018 ( after 3 years).

    My question is how this was possible ? I have written to Bank Manager yesterday and the reply is awaited.

    I know that SCSS can be extended by # years after completion of first 5 years’ term.

    Kindly advice

    Regards,
    K K De
    Mob : +91 98304-96279

  17. Subramanian V says:

    I require TWO clarifications:
    1. As the interest rates for SCSS is being revised on quarterly basis, does it mean that the investment will have a fluating rates? To be more specific, if I invest now in this quarter, I will get @ 8.3% pa only for this quarter & for subsequent quarters, the respective announced rates will be applicable-unlike Bank FDs.
    2. Can Husband & wife (both having separate PANs) can open individually in both their names each upto Rs.15 lakhs?

  18. Roshan lal says:

    After expiry of maturity period of 5 yrs + 3yrs , can this scheme once again start afresh with 5 yrs initially and 3 yrs as an extension?
    And how many times this process can be repeated?

    Pl advise

  19. Rajesh says:

    Dear Sir
    Can i get tax benefit for my elder brothers wife (Bhabhi) treatment ? Our family is undivided.
    Need your advice or suggestions.
    Thanks

  20. Ram S. says:

    This scheme does not give clarity. First, when the tenure is 5 years means it is totally a savings account, means whatever savings you make even before a day of last day of 5 years end need to be get back. Are they giving a certificate for the payment like that of NSC which is issued in denomination of certificates as of deposit made? When interest is compounded quarterly. In reality this is not a savings account but a Senior Citizens Deposits Scheme. Savings account by the name described a savings account for deposit and withdrawal. Certificate or Deposit is missed to give a real name to this scheme.

  21. Sunil Shah says:

    Sir, My father has opened SCSS account with UNION BANK OF INDIA befor eight months a go. He expired in month of March 2011. Nomination is there. I woud like to know that while closing this SCSS account i have to pay any penalty ? Can i get full principle amount of this SCSS account?This SCSS account is going to be close premature bacause of death of SCSS account holder.PLease reply me.
    Thanking you
    Sunil Shah.

  22. R K Agarwal says:

    peers : The SCSS 2004 is applicable to all >60 Years of Age.
    Rnjan: Enhanced Gratuity limit is made applicable from 24 May 2010 only.

  23. peers says:

    Is this scheme applicable to professionals and other senior citizens who were not in any service or only to retired employees.

  24. Ravindranath N says:

    As per the latest provisions of income tax Act the investment in Senior Citizens’ deposit scheme is also considered for deductions under section 80C of Income tax Act

  25. RANJAN says:

    PLEASE INTIMATE ME WHETHER INCREASED GRATUITY AMT. Rs. 6.50 lacs is tax exempeted, if then what is the procedures for refund of TDS AMTOF Rs.1.79 lacs against payment Rs. 6.50 as incresed gratuity deducted throgh FORM 16 BY MY EMPLOYER M/s OIL INDIA LIMITED.
    your early reply to my E-mail will be highly appreciated.
    thanking you
    ranjan

  26. GChandramouliswar says:

    Dear Sirs,
    I am alrady subscribing to ICICI Lomboard Pension Plan recoverable from my pension at Rs.2000/- P.M. Minimum payment period is 3 years. It is likely to be completed by August,2010. Can I invest this amouny now in this scheme
    cghatty@yahoo.com

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