The Senior Citizen Saving Scheme (SCSS) is one of the most reliable and government-backed investment options for senior citizens in India. The scheme was launched on 2nd August 2004, through GSR 490(E), SCSS aims to provide financial security, steady income, and tax benefits for retired individuals.
This scheme is available at post offices and authorized banks across India. It has undergone several revisions over time, including increasing the deposit limit, enhancing flexibility, and revising interest rates to meet the evolving needs of senior citizens. In this blog we have provided all the details about the scheme, features, benefits and more.
What is the Senior Citizen Saving Scheme (SCSS)?
The SCSS is a government-backed savings instrument designed for individuals who have retired or are about to retire. It allows them to invest a lump sum amount and earn regular quarterly interest, providing a safe and steady source of income post-retirement.
- Launch Date: 2nd August 2004
- Launched by: Government of India
- Purpose: To ensure financial security and regular income for senior citizens.
- Investment Range: ₹1,000 to ₹30 lakh (latest revision effective 1st April 2023)
- Interest Rate: 8.2% per annum (compounded quarterly, as per ongoing FY 2024-25)
- Tenure: 5 years, extendable in 3-year blocks with no limit on extensions
When was the scheme launched?
The SCSS was officially launched on 2nd August 2004. The scheme was introduced to provide secure investment options and regular income for senior citizens after retirement.
- Notification: GSR 490(E), dated 02-08-2004
- Purpose: Financial stability and assured returns for retired individuals
- Significance: Marked the government’s effort to safeguard retirement savings for senior citizens
Who launched the scheme?
The Senior Citizen Saving Scheme was launched by the Government of India under the Ministry of Finance. It is part of the Post Office Savings Schemes, designed to provide safe and reliable investment avenues for senior citizens, retirees, and defence personnel.
Overview of Senior Citizen Saving Scheme (SCSS)
The Senior Citizen Saving Scheme (SCSS) is a government-backed savings program designed to provide financial security and steady income for senior citizens after retirement. SCSS is particularly suitable for individuals seeking a safe and reliable investment option post-retirement.
| Feature | Details |
| Launch Date | 2nd August 2004 |
| Launched By | Government of India |
| Eligibility | Individuals aged 60+, early retirees aged 55-60 (VRS/Superannuation), retired defence personnel 50-60 years |
| Deposit Limit | Minimum: ₹1,000, Maximum: ₹30 lakh |
| Tenure | 5 years, extendable in 3-year blocks |
| Interest Rate | 8.2% per annum (FY 2024-25), compounded quarterly |
| Interest Payment | Quarterly (1st working day of April, July, October, January) |
| Premature Withdrawal | Allowed; 1% deduction if withdrawn before 1 year |
| Nomination Facility | Available |
| Tax Benefits | Deduction under Section 80C up to ₹1.5 lakh per annum |
| Availability | Post offices and authorized banks across India |
| Special Features | Safe government-backed returns, multiple extensions, flexible investment window for early retirees |
Who is eligible to invest in SCSS?
SCSS is designed for senior citizens and certain early retirees.
- Standard Eligibility: Individuals aged 60 years and above
- Early Retirement: Individuals aged 55-60 years retired under Voluntary Retirement Scheme (VRS) or Superannuation
- Defence Personnel: Retired personnel aged 50-60 years (excluding civilian defence employees)
- Joint Accounts: Can be opened with a spouse
- Exclusions: Hindu Undivided Families (HUFs) and Non-Resident Indians (NRIs) cannot invest
Recent Changes: Individuals aged 55-60 now have a 3-month window to invest after receiving retirement benefits (previously 1 month).
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What are the key features of SCSS?
SCSS comes with multiple features designed for the comfort and financial security of senior citizens.
- Investment Period: 5 years, extendable for 3-year blocks multiple times
- Interest Rate: 8.2% per annum, compounded quarterly
- Deposit Limits: Minimum ₹1,000; Maximum ₹30 lakh
- Interest Payment: Quarterly, credited on 1st working day of April, July, October, and January
- Premature Withdrawal: Allowed with 1% deduction if withdrawn before 1 year; previous norms deducted full interest
- Nomination Facility: Account holders can nominate a person to receive funds in case of death
- Tax Benefits: Eligible for deduction under Section 80C, up to ₹1.5 lakh per year
- Secure Returns: Being a government-backed scheme, SCSS provides assured returns without market risks
What are the objectives of SCSS?
The main objectives of SCSS include:
- Financial Security: Ensuring a safe investment option for retirement funds
- Regular Income: Providing quarterly interest payouts to cover monthly expenses
- Tax Savings: Promoting retirement savings through Section 80C deductions
- Flexibility: Allowing joint accounts, account extensions, and relaxed withdrawal norms
- Inclusivity: Catering to retirees, early retirees, and defence personnel
What are the benefits of SCSS?
Investing in SCSS offers multiple benefits for senior citizens:
- Hassle-Free Investment: Accounts can be opened at post offices or authorized banks
- High Interest Rate: Currently 8.2% per annum, paid quarterly
- Assured Returns: Returns are guaranteed by the Government of India
- Nomination Facility: Ensures funds are passed to a nominee in case of the depositor’s death
- Flexible Account Extension: Extend accounts multiple times in 3-year blocks
- Premature Withdrawal: Allowed with minimal penalty
- Tax Benefits: Eligible for Section 80C deductions
What are the recent changes in SCSS since it was launched?
The Department of Economic Affairs (DEA) announced 7 comprehensive changes in SCSS to improve its benefits:
- Extended time to invest retirement benefits from 1 month to 3 months
- Spouses of government employees can now invest retirement benefits
- Broadened definition of retirement benefits to include PF dues, gratuity, commuted pension, leave encashment, etc.
- Relaxed premature withdrawal norms: 1% deduction if withdrawn before 1 year
- No limit on account extensions; can extend multiple 3-year blocks
- Interest on extended deposits calculated at the rate applicable on extension date
- Maximum deposit limit increased from ₹15 lakh to ₹30 lakh
Also Check:
Questions asked in exam based on Senior Citizen Saving Scheme
Q1. When was SCSS launched?
A) 2000
B) 2002
C) 2004
D) 2006
Answer: C
Q2. Who launched SCSS?
A) RBI
B) Government of India
C) SEBI
D) NABARD
Answer: B
Q3. Minimum deposit in SCSS?
A) ₹500
B) ₹1,000
C) ₹5,000
D) ₹10,000
Answer: B
Q4. Maximum deposit in SCSS (2023)?
A) ₹15 lakh
B) ₹20 lakh
C) ₹25 lakh
D) ₹30 lakh
Answer: D
Q5. Standard eligibility age for SCSS?
A) 50
B) 55
C) 60
D) 65
Answer: C
Q6. Premature withdrawal deduction before 1 year?
A) 0.5%
B) 1%
C) 1.5%
D) 2%
Answer: B
Q7. SCSS interest rate (FY 2024-25)?
A) 7%
B) 7.5%
C) 8%
D) 8.2%
Answer: D
Q8. Maximum deduction under Section 80C?
A) ₹1 lakh
B) ₹1.25 lakh
C) ₹1.5 lakh
D) ₹2 lakh
Answer: C
Q9. Can spouses open a joint SCSS account?
A) Yes
B) No
Answer: A
Q10. Can HUFs invest in SCSS?
A) Yes
B) No
Answer: B
Q11. SCSS tenure?
A) 3 years
B) 5 years
C) 7 years
D) 10 years
Answer: B
Q12. Extension period for SCSS?
A) 1 year
B) 2 years
C) 3 years
D) 5 years
Answer: C
Q13. Interest is credited how often?
A) Monthly
B) Quarterly
C) Half-yearly
D) Annually
Answer: B
Q14. Eligibility for early retirees (VRS)?
A) 50-55
B) 55-60
C) 60-65
D) 65+
Answer: B
Q15. Are SCSS returns market-linked?
A) Yes
B) No
Answer: B
Q16. Who can invest in SCSS within 3 months of retirement?
A) 50-55
B) 55-60
C) 60-65
D) 65+
Answer: B
Q17. Can premature withdrawal be done after 2 years?
A) Yes, 1% deduction
B) Yes, 1.5% deduction
C) No
D) Only after 5 years
Answer: A
Q18. Maximum deposit for retired defence personnel?
A) ₹15 lakh
B) ₹30 lakh
C) ₹25 lakh
D) ₹20 lakh
Answer: B
Q19. Is SCSS available at banks?
A) No
B) Yes, authorized banks only
Answer: B
Q20. SCSS launched under which notification?
A) GSR 490(E)
B) GSR 500(F)
C) GSR 480(D)
D) GSR 470(C)
Answer: A
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