SBI Senior Citizen Savings Scheme

The State Bank of India or SBI is one of India’s largest financial statutory bodies, operational since 1955. It offers a host of financial products services to its customers, among which, its senior citizen savings scheme, in particular, has garnered immense popularity in recent times. 

A Senior Citizens Savings Scheme (SCSS) is a government-sanctioned savings opportunity for individuals aged 60 years or more. While it comes with a fixed tenure of maturity, it can be further extended by the account holder. 

Following is a look at the SBI Senior Citizen Savings Scheme and the pertinent information that one must be aware of before investing in it.

Features of the SBI Senior Citizen Savings Scheme

Customers of the State Bank of India can avail of this scheme and enjoy an attractive Senior Citizen Saving Scheme SBI interest rate against it.

Features of the SBI Senior Citizen Savings Scheme include –

• The minimum deposit amount for this scheme is Rs.1000, and the deposit cannot exceed Rs.15 lakh. 
• After the maturity period of 5 years, the account may be extended for a period of another 3 years. 
• An entire deposit made in a joint account can be received only by the first account holder.
• The depositor has an option to nominate more than 1 person. 
• Multiple withdrawals cannot be made from an account. 

Present Rate of Interest Against SBI Senior Citizen Scheme

The rate of interest under this scheme is declared by the Government in advance before every quarter. The interest rate applicable for the present quarter has been notified on July 1st, 2020, and currently stands at 7.4%. 

The rate of interest that was prevalent when the deposit was made in the savings account will be applicable for the first 5 years. Subsequently, the prevailing interest rate will be the one announced at the time of extending the scheme's tenure. 

In other words, since the SBI SCSS interest rate from September 11th, 2020, is 7.4%, deposits that are made under the scheme now will be subject to a 7.4% interest rate till September 2025, notwithstanding any changes to the interest rate in next quarter. After September 2025, that interest rate will be as announced for each quarter.

Under SBI Senior Citizen Savings Scheme, there is no cumulative option for the payment of interest. The interest is payable on a quarterly basis. The first tranche of interest is paid for the date that deposit is made until the quarter end, and henceforth, for each proceeding quarter. 

Here is an indicative list of the rate of interest in previous quarters –

Eligibility to Invest in SBI SCSS

To avail of the benefits of the SBI Senior Citizens Saving Scheme, an individual will have to ensure that he or she meets the following criteria –

• The individual should be aged 60 years or more. 
• One can be eligible to avail of the benefits of the SBI SCSS if he/she is above 55 years but is less than 60 years of age and has retired with VRS or superannuation.
• Retired Defence Services personnel can opt for this scheme if they have attained 50 years of age. 
• Members of Hindu Undivided Family (HUF), Person of Indian Origins (PIOs) and Non-Resident Indians (NRIs) are not eligible to open an account under this scheme.

Taxability of Senior Citizen Saving Scheme

SCSS SBI account holders can enjoy tax benefits under section 80C of the Income Tax Act, 1961, under which they can enjoy tax benefits on income earned of up to Rs.1.5 lakh. 

Interest earned through this account is entirely taxable. If the interest in a financial year, generated under this savings scheme amounts to more than Rs.50,000, it will attract TDS (Tax Deducted at Source). 

Comparison Between Senior Citizen Saving Scheme and Fixed Deposit 

SBI has announced a special fixed deposit scheme called ‘SBI WeCare’ for senior citizens. It differs from the Senior Citizen Savings Scheme (SCSS) in quite a few aspects.

Documents Required to Open an SBI SCSS Account

 An SBI Senior Citizen Scheme account can be opened in any of its branches. The following self-attested documents are required for starting the account –

• Form A
• Identity proof like passport, PAN card etc.
• Address proof like Aadhar card, telephone bill
• Age proof like Voter ID, birth certificate etc. 
• Passport size photographs 

Eligible individuals can invest in this scheme by opening an account through any Indian Post Office. The interest generated per the applicable SBI SCSS interest rate is automatically credited to the investors’ linked account at the same post office. One can, thus, gather substantial earnings through this savings scheme.