Senior Citizens Savings Scheme SCSS

Most sites will have already told u all the salient features of SCSS 2004.

Chk out this rather detailed faq RBIs page on SCSS 2004

It is a good scheme for resident 60+ yr old seniors with early wdl option albit with a penalty. What i want to focus on are practical aspects of running an account.

1 Where to open ?

SBI, BOI And ICICI? are decent banks and can be a good option. Post office can be very slow and tedious as they are over bureaucratic and shoddy. Note as it is treated as a service banks can also be lethargic in dealing with these account holder.

2. Opening Precautions

Carry photos , pan details, kyc details , bank chq (cancelled) etc. Be careful to abide by the rules especially if u are a retiree parking funds in scss.

3. Nomination

Always nominate a person…saves loads of paperwork later for ur loved ones. In case of joint accounts the joint holder precedes the nominee in claims.

4.How to Transfer SCSS accounts to other Deposit offices:

QUOTE Notification No. GSR 176 (E) -dated 23.3.2006,  use  FORM G
Charges : Where the deposit is Rs. One lakh or above, 5 Per Lakh for first transaction, RS. 10 per lakh of deposit for the second and subsequent transfers.

5. TDS / TAXABILITY / Tax benefit

Investments carry an 80C rebate.

Notification No. F.No. 2-8/2004-NS.II dated 28.3.2006. the deposits are taxable if interest exceeds set limits (Rs10,000) . To avoid TDS file Form 15 h if ur above 65 yrs else Form15G if ur 60 to 64 yrs annually with ur Deposit office.

5. Repayment /Early or Premature Withdrawal

LOCKIN Period : 1 YR

1yr to 2yrs : 1.5 % penalty deduction from corpus

2yrs + to 5yrs : 1%  penalty deduction from corpus

Maturity 5yrs : Interest at Postal SB rates on corpus if a/c is not extended vide FORM B within one year of  the maturity date. 

No penal interest if ac is closed after one yr from the extension date .

On Death of depositor:

In case of death of the depositor before maturity the account shall be closed and deposit refunded on application along with interest to the nominee, or legal heirs in case the nominee has also expired or nomination was not made as per rules.

However, in case of the demise of the principal depositor, the spouse either being a joint holder or sole nominee may continue the account on existing terms of the Scheme, provided the spouse has not opened any such account, and even if the spouse has another account the total deposits of both the accounts should not exceed Rs.15 lac.


6 thoughts on “Senior Citizens Savings Scheme SCSS

  1. true, but what choice do they have ?ulips ? mf?
    it beats most life insurance policies and differed annuity products
    worse, where else is the coveted security that a govt guarantee gives?
    a better idea would be something like tips which is inflation adjusted
    but lets get real no govt in India that is accustomed to debasing currency will do that. i used to wonder why my father was so worried abt inflation
    in the indira era .. this gov is aping her policies… and lo and behold we are facing relentless inflation in rents and basic expenses…
    the fisc defecit is at record levels
    as of now scss is still not that bad , cause if they keep it for
    a yr @9% and wdraw it later paying a penalty there is no loss per say
    as they will also get 8% on a fd
    but this is most lucrative option for fresh retirees.

  2. My 75 yrs old mother in law is having 4 deposits in post office under sr citizen scheme. She has compleated her KYC norms also. Eventhough Post Master is demanding photograph every time while investing in the said scheme. Is it coumplsary to give?
    Please answer my quiry. Regards.

    Sudhanshu Sane

    1. The sad bit is that this govt is making a drama of kyc when it lets out big fish like the race horse dealer and people like Supriya sule tell the tax dept not to act against certain accounts in politically controlled coop banks in maharashtra.
      I had to also give photo and kyc each time i opened the scss account
      the rules on this issue are vague, so bureaucracy demands everything over and over again… this is sad harassment.

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