What is ‘Senior Citizen Savings Scheme’?:Regular income after retirement; from interest rates to account opening process – find key details here

Retirement brings the biggest question of how to manage expenses without regular income. In such situations, if planning is not done in advance, financial pressure can increase. If you haven’t planned for pension beforehand, difficulties may increase. However, the good news is that the Government of India has created several schemes for senior citizens that provide them with fixed monthly payments. One of these schemes is the Senior Citizen Savings Scheme, which provides secure returns to people aged 60 years or above. Therefore, today we will discuss the ‘Senior Citizen Savings Scheme’. Along with this, we will learn: Expert: Rajshekhar, Financial Expert Question- What is Senior Citizen Savings Scheme (SCSS)? Answer- Senior Citizen Savings Scheme (SCSS) is a government savings and pension scheme. It is specifically designed for people who are 60 years or older. This savings scheme provides pension every three months along with interest on deposited money, which ensures regular income after retirement. It also offers tax benefits. Therefore, it is a good investment and pension option for senior citizens. Question- Who can invest in Senior Citizen Savings Scheme? Answer- To invest in SCSS scheme, certain criteria need to be fulfilled. Let’s understand this through the graphic. Question- How much can you invest in Senior Citizen Savings Scheme? Answer- You can invest up to a maximum of 30 lakh rupees at once in this scheme. If husband and wife have separate accounts, then a total of up to 60 lakh rupees can be deposited. Investment in this scheme can be started with a minimum of Rs 1,000. The important thing to note is that money can only be deposited in multiples of Rs 1,000. That means Rs 1,000, Rs 2,000, Rs 3,000, etc. In this, money needs to be deposited together as a lump sum, cannot be paid in installments. You can earn regular income with good interest every quarter by investing retirement funds like PF (Provident Fund) or gratuity here. Question- What is the interest rate and pension amount in Senior Citizen Savings Scheme? Answer- The current interest rate is 8.2% per annum. Interest is credited to the account every three months. For example, on an investment of Rs 30 lakh, you get a regular income of Rs 2.46 lakh annually or approximately Rs 20,500 per month. Let’s understand all the features of Senior Citizen Savings Scheme in detail: Safe Investment: This is a government scheme. Therefore, the money invested remains secure and provides fixed returns at the specified time. Interest Rate: Currently, interest is paid at 8.2% per annum (for the first quarter of financial year 2025-26). Investment Limit: Minimum investment of Rs. 1,000 and maximum up to Rs 30 lakhs can be made. Investment Method: Investment up to one lakh rupees can be made in cash. Payment through cheque is mandatory for amounts exceeding this. Time Period: The basic period of the scheme is 5 years, which can be extended by 3 more years. Application for extension must be made within one year of maturity. Account Transfer Facility: Account can be transferred between post office and bank. This facility is available throughout India. Nominee Facility: Nominee can be appointed at the time of account opening or later. Question- Is there any tax exemption on investing in Senior Citizen Savings Scheme? Answer- Yes, tax benefits are available on SCSS investments. Question- Can money be withdrawn before maturity? Answer- Yes, money can be withdrawn from Senior Citizen Savings Scheme before maturity, but it may incur penalties. If the account is closed within one year, the interest earned on principal is taken back. There is a 1.5% deduction between 1-2 years and 1% deduction after 2 years. Question- Where and how to open SCSS account? Answer- SCSS account can be opened at any authorized bank or post office. Documents like Aadhaar card, PAN card and age proof are required for this. Account can be easily opened by filling the prescribed form and depositing a lump sum amount, which starts quarterly income. Question- Can we open multiple accounts? Answer- Yes, a person can open multiple accounts in SCSS, but the total investment across all accounts should not exceed Rs 30 lakh. Additionally, joint account can only be opened with life partner. The deposited amount in this account is considered in the name of the first account holder. Question- Can we add a nominee to this? Answer- Yes, the facility to add a nominee is available in SCSS account. A nominee can be designated either at the time of opening the account or later. One or more nominees can be added, which makes the transfer of funds secure and easy in case of the account holder’s death. Question- Can the interest rate change? Answer- The interest rate of SCSS is set by the government every quarter. Therefore, it can change from time to time. However, once you invest, the interest rate applicable to that account remains fixed for the entire term and is not affected by future changes. Question- Is regular cash flow planning easy in SCSS? Answer- Yes, SCSS provides fixed interest on a quarterly basis, which maintains regular and predictable cash flow. This makes budgeting easier for retired people and helps manage daily expenses like medicines or household costs in a systematic way. Question- Who benefits the most from this? Answer- SCSS is most beneficial for people who have retired and have a lump sum amount available, such as PF or gratuity. It is particularly suitable for investors who want safe and regular income with low risk. Question- What mistakes should be avoided while investing in SCSS? Answer- It is important to avoid certain mistakes while investing in SCSS. Such as- Note: It is important to adopt a balanced investment strategy instead of relying solely on interest. Question- What is the difference between SCSS and FD? Answer- SCSS is a government scheme that currently offers 8.2% fixed interest and quarterly income, while FD is a bank product that has relatively lower or variable interest rates. SCSS has a 5-year lock-in period, while FD offers more flexibility and options for different time periods. Question- Can SCSS fulfill all retirement needs? Answer- No, SCSS alone cannot fulfill all retirement needs. While it is a good source of safe and regular income, for better financial planning it should be used along with other investment options like FDs, bonds and mutual funds to get both growth and security.