Post office Senior Citizen Savings Scheme (SCSS) 2024: Did you know you can park funds at designated post office branches for a host of benefits? India Post, which has a network of more than 1,55,000 post office branches spread across the length and breadth of the country, offers a bunch of government-backed savings plans, known as small savings schemes. Two schemes that offer the highest rate of return among the total 13 types of small savings schemes are the Senior Citizen Savings Scheme (SCSS) and the Sukanya Samriddhi Account. 

Here are some of the key things to know about the Senior Citizen Savings Scheme, as per the India Post (indiapost.gov.in) website: 

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Interest rate 

For the final three months of the current financial year, which ends on March 31, the Senior Citizen Savings Scheme offers interest at the rate of 8.2 per cent per annum. 

Minimum investment 

Eligible individuals can set up a Senior Citizen Savings Scheme account at designated post office branches by paying a minimum of Rs 1,000.

Maximum investment  

One can deposit a lump sum of in multiples of Rs 1,000 up to Rs 30 lakh to set up the account.

What happens if the depositor crosses this limit?

Any excess deposit triggers a refund immediately along with interest at the rate applicable to the post office savings account. This interest is calculated from the date the excess deposit is made to the date of refund.

Eligibility criteria

Who can open the Senior Citizen Savings Scheme (SCSS) account? All individuals aged 60 years and above can open the account, either individually or jointly with a spouse. Besides, the following individuals can open the account even earlier: 

  • Retired civilian employees above 55 years of age and below 60 years of age, subject to the condition that the investment is made within one month of the receipt of retirement benefits
  • Retired defense employees above 50 years of age and below 60 years of age, subject to the condition that the investment is made within one month of the receipt of retirement benefits 

Interest payment

The interest is payable from the date of deposit to March 31, September 30 or December 31 in the first instance, and on April 1, July 1, October 1, and January 1 after that.

The interest is calculated every quarter, and applicable from the date of deposit to March 31, June 30, September 30, or December 31.

Premature closure

The account has no lock-in period, which means deposits can close the account anytime after opening. However, certain rules apply to deposits made before five years of opening: 

  • If the account is closed before one year, no interest is payable; any interest paid in the account is recovered from the principal 
  • If the account is closed after one year but before the completion of two years from the date of opening, an amount equal to 1.5  per cent is deducted from the principal 
  • If the account is closed after two years but before the completion of five years, an amount equal to 1.0 per cent is deducted from the principal 
  • An extended account can be closed after the expiry of one year from the date of extension without any deduction

Is SCSS return taxable?

The interest amount is taxable if the total interest in all SCSS accounts exceeds Rs 50,000 in a financial year. In such cases, tax deducted at source (TDS) is applicable from the total interest accrued.

However, no TDS is deducted if the interest income is reported in Form 15G or 15H as per income tax laws.  

Did you know that the Senior Citizen Savings Scheme and the Sukanya Samriddhi Account offer the highest return among the various small savings schemes?

Here's a list of interest rates applicable to the Senior Citizen Savings Scheme and other small savings schemes for the quarter ending March 31, 2024: 

Instrument Interest rate​ Compounding Frequency
Post office savings account​​ 4% Annually
One-year time deposit 6.9% (annual interest Rs 708 for Rs 10,000) Quarterly
Two-year time deposit​​ 7.0% (annual interest Rs 719 for Rs 10,000) Quarterly
Three-year time deposit​​ 7.1% (annual interest Rs 719 for Rs 10,000) Quarterly
Five-year time deposit 7.5% (annual interest Rs 771 for Rs 10,000) Quarterly
Five-year recurring deposit scheme​​ 6.7% Quarterly
Senior Citizen Savings Scheme​​ 8.2% (quarterly interest Rs 205 for Rs 10,000) Quarterly and Paid
Monthly Income Account​​ 7.4% (monthly interest Rs 62 for Rs 10,000) Monthly and paid
National Savings Certificate (VIII Issue) 7.7% (maturity value Rs 14,490 for Rs 10,000) Annually
Public Provident Fund (PPF) Scheme​​ 7.1% Annually
Kisan Vikas Patra​​ 7.5% (matures in 115 months) Annually
Mahila Samman Savings Certificate​​ 7.5% (maturity value Rs 11,602 for Rs 10,000) Quarterly
Sukanya Samriddhi account​​ 8.2​% Annually
(Source: indiapost.gov.in)