HDFC Bank, our country’s largest private sector bank, has started accepting deposits under the ‘Senior Citizen Savings Scheme’ (SCSS).
Although the SCSS is not a new scheme and has been available for many years, it is a public sector initiative supported by the Government of India. Recently, HDFC Bank has begun offering this scheme for deposits.
Investment Protection and Guaranteed Interest: The Government of India launched the SCSS to provide a safe investment option for individuals aged 60 years and above.
The current interest rate for this scheme is 8.20% per annum, which is higher than any other government sector scheme. Most fixed deposits offered by banks do not provide such competitive interest rates.
The central government determines the interest rate for the SCSS every three months. As a public sector scheme, investments in the SCSS come with protected and guaranteed interest.
Who Can Invest in SCSS? As the name suggests, the Senior Citizen Savings Scheme is for seniors. It is available to retirees and those who have opted for voluntary retirement between 55 and 60.
Subject to certain conditions, individuals who have retired from the defense services after age 50 can also open an SCSS account.
Deposits made under this scheme are eligible for tax exemption of up to Rs. 1.5 lakh per financial year under Section 80C of the Income Tax Act, providing an added benefit for senior citizens.
SCSS Interest Income: An SCSS account’s maturity period is five years, with an option to extend it for three years if necessary.
The account can also be prematurely closed urgently, ensuring funds are available when needed. A maximum deposit of Rs. 30 lakh can be made in the SCSS account. Interest is credited to the linked savings account every three months, providing a steady source of income.
Other Banks Offering SCSS Accounts: Several banks also offer SCSS accounts, including:
- State Bank of India
- Punjab National Bank
- Bank of Baroda
- Bank of India
- IDBI Bank
- ICICI Bank
- Canara Bank
- Central Bank of India
- Dena Bank
- Indian Bank
- Indian Overseas Bank
- Oriental Bank of Commerce
- UCO Bank
- Union Bank of India
- United Bank of India
Market experts suggest that the Senior Citizen Savings Scheme is an excellent option for seniors seeking a reliable savings plan and income tax benefits.