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Senior Citizen Scheme: How it works and what are the top features?

03 Sep 2021 by IDFC FIRST Bank
What is Senior Citizen Saving Scheme

What you should know about the Senior Citizen Scheme

The Senior Citizens Savings Scheme (SCSS) is a plan designed to meet the post-retirement requirements of people 60 years old or older. It also proves helpful for those who have retired via superannuation or the Voluntary Retirement Scheme and are 55 years old or older but not yet 60 years old.

How does the SCSS scheme work?

Fixed deposits, offered by banks and non-banking financial corporations in India, offer lower returns than the Senior Citizen Saving Scheme. For FY20-21, the interest generated on normal savings accounts in India ranges from 3% to 3.5 per cent for a government-owned bank. Fixed deposits pay interest rates ranging from 5% to 5.5 per cent in the same year, while the SCSS pays a 7.4 per cent annual return to investors.


All you need to know about a Fixed Deposit account

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Features of the Senior Citizen Savings Scheme


Any Indian citizen living in the nation, who is 60 years old or older, can apply for the SCSS. People who have retired upon superannuation or under VRS must be 55 years old or older but not yet 60 years old, with the account being started within one month of receiving retirement funds and the investment amount not exceeding the number of retirement payments. Under the limit of 50, ex-defence service members, except civilian defence workers, may open an SCSS. NRIs (non-resident Indians) are not eligible to partake in the SCSS scheme benefits.

The number of accounts

An account holder can have multiple accounts as long as the investment limit imposed by the Government of India does not surpass ₹15 lakh. Up to four trustees per account are allowed in any variety of accounts registered in a personal capacity and with a spouse only. The total amount invested across all accounts should not surpass the SCSS's maximum investment ceiling.

The nation's federal government scheme for elderly citizens, who are Indian by birth, allows them to provide the security of a sovereign guarantee on their capital that they earn after the scheme's maturation.


Amount needed to open an account

A minimum deposit of ₹1000 is mandatory to start an account. The depositor must pay with cash for any investment less than ₹1 lakh. Transaction over ₹1 lakh attracts cheque payments. When a cheque payment is made, the date of realisation of the cheque as per the government's records is set as the exact day of the account's creation.

SCSS rate of Interest

The government determines the rate of interest on an SCSS deposit at the start of the fiscal year. For instance, in FY19-20, the interest rate was set at 8.60 per cent, whereas in FY20-21, the interest rate is 7.40 per cent.


A Senior Citizen Saving Scheme account matures after five years from the date it was opened. It can be extended for three years within the first year of the creation of the account. In such circumstances, the account can be cancelled at any point after the one-year extension period has expired without incurring any charges. If a person does not extend the account past maturation but maintains their deposit in their SCSS account, they are eligible to receive the same interest rate as a normal savings account with the bank that started the account.

Many people are curious about the SCSS. It is not surprising because it is a great scheme for those who do not receive pensions from their workplace. It affords a level of security for the elderly, where they are assured of a stable and financially viable future.

If you are thinking of investing in the SCSS, you can do so through the IDFC FIRST Bank netbanking portal. With features like priority treatment at bank branches, free doorstep banking and ₹35 lakhs free personal accident insurance cover, the senior citizen savings scheme account offered by us is among the best in the country.




The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.