What is SCSS?
The Senior Citizen Savings Scheme (SCSS) is a government-backed savings scheme for senior citizens in India. It offers a regular income with quarterly interest payouts and is one of the safest investment options post-retirement.
Formula Used
Quarterly Interest = (Principal x Annual Interest Rate) / 4
Maturity Value = Principal + Total Interest Earned (after 5 years)
Example
If you invest Rs. 10,00,000 in SCSS at 8.2% annual interest, your quarterly interest payout will be:
- Quarterly Interest = (10,00,000 x 8.2%) / 4 = Rs. 20,500
- Yearly Interest = Rs. 82,000
- Total interest in 5 years = Rs. 4,10,000 (if rates remain unchanged)
- Maturity Value = Rs. 10,00,000 + Rs. 4,10,000 = Rs. 14,10,000
Benefits
- Guaranteed returns with government backing
- Quarterly interest payouts
- Safe investment for retirees
- Eligible for tax benefits under Section 80C
Frequently Asked Questions (FAQs)
Who can invest in SCSS?
Senior citizens aged 60 years or more. Retirees aged 55+ under VRS can also invest within one month of retirement.
What is the tenure of the SCSS?
The maturity period is 5 years, extendable once for 3 more years.
Can I open a joint SCSS account?
Yes, with your spouse as the second holder.
Is premature withdrawal allowed?
Yes, but it may attract penalties based on how long you've held the account.