SBI Senior Citizen Savings Scheme 2023: Interest Rate


Retirement may be frightening when one thinks that a person who works all of their life is faced with the question of leading an income-less leg of their twilight years. Many people believe that seniors have no place in the financial world at this stage of life, which is a bigger misconception than it seems to be.

Unsurprisingly, financial stability and security assume a far more impactful role with age. Adults usually send away money into fixed deposits (FDs) or other investments that are usually not safe in the long run and give underwhelming returns. The SBI Senior Citizen Savings Scheme offers a simple approach to making money in a risk-free investment that requires no work or time from you.

One of India's main financial, statutory organizations, the State Bank of India (or SBI), has existed since 1955. Customers may choose from a wide range of financial goods and services, but its brainchild in SBI SCSS is one such scheme that has grown incredibly popular in recent years.

SBI SCSS is a government-sanctioned savings SBI senior citizen scheme for individuals over 60 years. Although it has a set maturity period, the account holder may choose to extend it longer.

Because the SCSS scheme in SBI is a government-backed investment programme, it offers guaranteed quarterly returns. This program's ultimate goal is to assist seniors in securing a steady income after retirement. Accredited banks and post offices in India provide the Senior Citizen Savings Scheme.

Retired taxpayers who desire to create income through secure investments can use the Senior Citizen Savings Scheme by SBI. A retired individual can create a joint account with their spouse and make investments via cash, checks, or even demand drafts they feel comfortable with.

The Senior Citizens Savings Scheme, which is ultra-safe and supported by the government in addition to being tax deductible, is a great alternative for retired taxpayers. On that note, let's dive deep into everything there is to know about the SBI Senior Citizen Savings Scheme.

Eligibility Required to Avail the Benefits of the SBI Senior Citizen Savings Scheme

There are minimal prerequisites to using the SBI Senior Citizens Saving Scheme's benefits. To be eligible for the SCSS programme, you must guarantee that you satisfy the following requirements:

  • First, you must be 60 years or older to be eligible for the scheme.
  • You and your spouse can open a joint or individual account.
  • You may apply for the programme if you are 55 years of age or older and have retired in some other way, including on superannuation. This regulation is dependent on your age as of the day your account was opened.
  • The programme is also open to retired members of the Defense Services who turn 50.
  • Hindu Undivided Families (HUF) and NRIs are ineligible to create accounts under the SBI SCSS programme.

How to Open an SBI SCSS Account

Broadly put, a depositor must visit any deposit office and apply Form A to open a Senior Citizens Savings Scheme Account with SBI bank. Additionally, they must deposit the money in multiples of a thousand and present identification as evidence of age. As already stated, one might choose to create a joint account with their spouse or an individual account.

A person can have several accounts as long as their combined deposits do not exceed the maximum amount of INR 15 lakhs. More precisely, the maximum contributions should be limited to INR 15 lakhs or the retirement benefits (whichever is lower).

You can enjoy the freedom of opening an SBI Senior Citizen Savings Scheme account in any branch that feels convenient to you. However, bear in mind to carry the following self-attested documents for a hassle-free experience:

  • Identity proof can be a PAN card, Aadhar card, Driving Licence, Passport etc.
  • Address Proof which can be Aadhar, electricity bill etc.
  • FormA
  • Age proof can be a 10th/12th mark sheet, birth certificate, Voter ID, etc.
  • Passport size photographs

Anyone who meets the requirements can invest in this programme by establishing an account at any Indian Post Office. The linked accounts of the investors at the same post office are immediately credited with the interest earned in accordance with the appropriate SBI SCSS interest rate.

Features & Benefits of the SBI Senior Citizen Savings Scheme

Since the Government of India supports the SBI Senior Citizens Savings Scheme, it is a secure programme that offers tax advantages to investors who are 60 years of age or older. The programme is a great choice for retired taxpayers due to its distinguishing characteristics.

Also, it is no secret that Customers can hugely benefit from the competitive and lucrative SCSS interest rate in SBI. The Senior Citizen Saving Scheme SBI Interest Rate is in line with the government-issued guidelines and declaration. The latest SBI SCSS interest was pegged at an enticing 7.4% mark.

Under the SBI Senior Citizen Scheme, interest is not paid cumulatively. Rather, after each quarter, interest is due to be paid. There is no additional return on it if you do not withdraw it, and from the time of deposit until the end of the quarter, the first instalment of interest is due.

Let's understand more features and benefits that the SCSS scheme in SBI comes with:

  • You can prolong it for a further 3 years once the first 5 years of maturity have passed.
  • While the SCSS plan requires a minimum deposit of INR 1,000, the maximum deposit in this scheme is liable to stay under INR 15 lakh.
  • As already stated, the interest generated by the SCSS scheme is payable every quarter. If an account holder does not claim such interest cannot be expected to earn additional interest.
  • The SBI SCSS interest rates are declared on a quarterly basis, currently fixed at 7.4% for a long time.
  • It is important to note that depositing in a joint account (freedom to add spouse) means that only the first account holder is liable to receive the full amount.
  • Your account must be funded with the deposit you made when you opened it, either on or after the maturity period. As explained previously, the maturity period might be extended to eight years from five years.

Let us now understand the tax benefits that come with SBI's Senior Citizen Savings Scheme through TDS (Tax Deducted at Source) and Income Tax Under Section 80C.

It is important to note that TDS is required if an account holder earns more than INR 10,000 in interest in a fiscal year. Therefore, TDS will not be applicable if interest generated in a financial year totals less than INR 10,000. For investments up to INR 1.5 lakh, account holders would benefit from income tax benefits under Section 80C of the Income Tax Act, but Investments that exceed the mark of INR 1.5 lakh are liable to be taxed.

Account Maturity and Depositor's Death

After five years after the date the account was opened, the deposit office will pay the deposit amount, i.e. considering that the depositor presents the passbook and a written application on Form E. When a depositor's Senior Citizens Savings Scheme account with SBI reaches maturity and is not closed or even extended, the account will be deemed to have reached maturity.

It also makes sense to understand that the account may be terminated whenever it reaches maturity, but the depositor will still be responsible for the interest. In a sudden bout of an unfortunate mishap, if the depositor dies before the account reaches maturity, the SBI Senior Citizens Savings Scheme account will be terminated.

As is the norm, the deposit and interest will be returned to the nominee that was stated previously. In other cases, the return can also be given to the depositor's legitimate successor if there is no nominee or the nominee has died away.

Rules for Premature Closure

Every quarter, you can take a withdrawal of your interest earnings from the SBI SCSS programme. However, the scheme guidelines do not permit the withdrawal of money that has been deposited. You must submit an application using Form E to have an SBI SCSS account prematurely closed.

Another interesting tidbit is that after one year from the account inception date, SBI SCSS accounts can be prematurely closed, and money is prematurely withdrawn while staying within legal boundaries.

It is advisable to be mindful of some of the terms and conditions when closing the SBI Senior Citizens Savings Scheme account.

  • You won't receive any interest if you shut the account before one year has passed from the inception date.
  • The principal amount will be reduced by the amount of interest previously paid.
  • If the account is closed one year from the opening date, but before two years, the balance will be reimbursed after deducting a 1.5% penalty of the deposit amount.
  • If the account is closed on or after the 2-year mark (but before the 5-year mark), the amount must be reimbursed after subtracting 1% of the deposit.

Drawbacks of SBI SCSS

  • The investment entails risk since the bond yield might fall due to underperformance, which would reduce the profits.
  • The SBI Senior Citizens Savings Scheme has an investment cap that ensures that more than INR 15 lakhs cannot be invested in an account by one person. Also, deposits can only be made in multiples of INR 1,000.
  • For those not searching for a stable income, quarterly payouts might not be the most appealing approach.
  • A penalty of 1% will be assessed if the account is closed for any reason after the first two years from its opening.
  • 1.5% of the balance will be charged as a penalty if the account is closed within the first two years of the account's establishment for any reason.
  • The interest generated through the SBI Senior Citizens Savings Scheme is taxable even if the investments made under this programme are tax-exempt. The TDS deducted for interests earned over INR 10,000 in a financial year will then have to be filed during Income tax returns for a full refund. This can be an inconvenience if older individuals do not possess a taxable income.


Is it necessary for an individual to open a new savings account that can be used for the interest deposited at regular intervals?

No, a person is not necessarily required to solely start new savings account for this purpose. At the deposit office where their joint or single account is held, the interest will be deposited to the current savings account.

If the account holder doesn't shut or renew the account at maturity within a year of maturity, how is the interest calculated?

In that scenario, the account is considered to be matured, and after maturity, interest rates are applied consistently and in accordance with the regulations. Any additional interest that was paid after the account reached maturity will be subtracted.

Is it a mandatory requirement that the joint account holder has to deposit a minimum amount into the account?

Since the account holder is in complete charge of managing the whole investment placed into the account, there arises no need whatsoever for a minimum deposit requirement for the joint account holder.

What are the qualifications or eligibility benchmarks that a person must meet to open a joint senior citizen savings account?

When creating a combined SCSS account, the first depositor must be older than 60. However, there is no age restriction for the second application whatsoever. Also, it should be noted that it is only with the spouse that you can open a joint account. However, only the first account holder will be responsible for the whole amount in a joint account.

Can the joint account holders also be the primary account holders on different accounts?

Joint account holders may also be the primary account holders on a given account. However, each deposit is only eligible for a maximum of INR 15 lakh.

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