Senior Citizens Savings Scheme 2020: Here’s All You Need To Know

Post-retirement people look for a safe and higher profit yielding investment. They hesitate to invest their funds in risky equities which pertain to capital loss. Instead, they want to keep it safe in PPF, NSC, fixed deposits or SCSS. Investors who want to be financially independent for their livelihood prefer FDs or Senior Citizen Savings Scheme that enable them to earn a regular income. Both are risk-free investments.

Senior Citizens Savings Scheme(SCSS) Eligibility
The Senior Citizens Savings Scheme (SCSS) is a government-aided scheme known for the highest rate of returns, highest security, regular interest and tax saving for investors who have attained 60 years and above. Also, individuals aged 55+ years can apply for the SCSS provided they have retired under applicable superannuation or VRS regulations. In this case, it is mandatory to open the account within one month of the receipt of retirement benefits. Retired defence personnel can also apply for SCSS provided they meet other terms and conditions for eligibility.


This is a 5 years scheme, launched in the year 2004. Investors can deposit up to 15 lakhs for 5 years and they extend the scheme validity for 3 more years. Investors can withdraw a premature scheme but only after one year of opening the account. Once your funds are locked, your returns are guaranteed.


The SCSS interest rate is revised quarterly i.e. once in every 3 months. In the present economic scenario, there is good news for investors regarding SCSS. The government has issued a notification to keep the interest rate the same 7.4% for the quarter ending December 2020 also.

Investors can apply for SCSS through post offices, designated public and private banks.

Senior Citizens Savings Scheme vs. Fixed Deposits

SCSS and fixed deposits both offer higher returns for senior citizens. Still, there can be a comparison between them:

Maximum deposit Limit

Maximum limit to invest in an SCSS is 15 lakhs. An individual cannot put more funds than Rs. 15 lakhs in their SCSS account. Whereas there is no maximum limit to invest in fixed deposits. With Bajaj Finance FD, one can invest up to one crore.

Quarterly revision of interest rates

The rate of interest on SCSS is revised 4 times a year i.e. every quarter. Interest rates depend on the market, inflation level, etc. Hence, it may be the same or lower down after revision. On the other hand, once your funds are locked-in at a rate of interest, it will be the same for the complete tenor of FD. Bajaj Finance FD is offering one of the highest FD rates in India as compared to banks and other financial institutions.

Maturity tenor

The funds can be deposited in the SCSS for 5 years only. On the other hand, fixed deposits offer flexibility in the lock-in period.

Premature withdrawals

An investor can not withdraw their scheme before the completion of 2 years. And after two years if the funds are withdrawn, there will be a penalty of 1% of the deposited amount. Whereas fixed deposits withdrawal regulations are less stringent and vary institution to intuition.

Mode of deposit

You can invest in SCSS for cash only if the investment amount is less than 1 lakh. If the investment amount is more than 1 lakh, a cheque payment needs to be made. On the other hand, with corporate deposits such as Bajaj Finance FD, you can avail a 100% paperless online application process and also get an additional interest rate benefit of 0.10% if you invest online.

Customer Type

NRIs and persons of Indian Origin (PIOs) can not apply for the SCSS. Bajaj Finance FD offers the facility of FDs to NRIs and PIOs with NRO account.

There is no considerable comparison for senior citizen fixed deposit interest rates between SCSS and Bajaj Finance FD as both are offering almost equal fixed deposit rates. However, Bajaj Finance FD offers more flexibility and value-added benefits as compared to SCSS.