HDFC Bank starts accepting Senior Citizen Savings Scheme deposits; check highlights, investment options

HDFC Bank has announced that it is now accepting deposits under the Senior Citizen Savings Scheme (SCSS), joining the ranks of several other public and private sector banks that offer this government-backed investment option. The SCSS is designed to provide a secure financial avenue for individuals aged 60 years and above, ensuring guaranteed returns at an interest rate of 8.2% per annum. This move further broadens the accessibility of this financial product to retirees who are seeking stable, high-interest investments for their savings.

Investing in SCSS

The SCSS specifically caters to retirees, including those who have opted for superannuation, voluntary retirement schemes (VRS), or special VRS, provided they are between 55 and 60 years old. Moreover, retirees from defence services can open SCSS accounts under certain conditions once they reach the age of 50. The scheme is structured to support retirees in securing a reliable financial future with the added benefit of tax deductions. Deposits made under this scheme qualify for tax deductions under Section 80C of the Income Tax Act, up to Rs 1.5 lakh per annum, making it a tax-efficient investment choice for retirees.

The SCSS accounts have a maturity period of five years, which can be extended for an additional three years upon maturity. The flexibility of the scheme is further enhanced by the possibility of premature closure under specific conditions, thus catering to the dynamic financial needs of senior citizens. Each individual can deposit up to Rs 30 lakh, and the interest is paid quarterly, directly credited to the linked savings account, providing a steady stream of income. This feature makes SCSS a preferred choice for those prioritising regular income post-retirement.

HDFC Bank offering SCSS

The inclusion of HDFC Bank in the list of financial institutions offering SCSS accounts is significant. Other private sector banks, such as ICICI Bank and IDBI Bank, as well as numerous public sector banks including the State Bank of India, Punjab National Bank, and Bank of Baroda, also provide this scheme. This comprehensive availability across both sectors underscores the widespread adoption of SCSS, ensuring that senior citizens can access these benefits at their convenience, irrespective of their banking preferences. The uniform interest rate across these banks ensures that the choice of bank does not affect the returns.

In the broader market context, the introduction of SCSS by HDFC Bank aligns with the strategic positioning of private sector banks to cater to the evolving needs of the senior populace. As banks vie to increase their share of this lucrative market, SCSS represents a critical product offering. Analysts note that such schemes enhance the financial security of the elderly, a demographic increasingly focused on fixed income over volatile market gains. With competitors like ICICI Bank and IDBI Bank also in the mix, HDFC Bank's inclusion could influence market dynamics, potentially attracting more retirees seeking a robust savings plan with tax benefits. 

Other banks offering SCSS account

Andhra Bank
Allahabad Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
Indian Bank
Indian Overseas Bank
Oriental Bank of Commerce
Punjab National Bank
State Bank of Bikaner & Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
Vijaya Bank
IDBI Bank
ICICI Bank

Who can invest in SCSS

Individuals above the age of 60, including retired civilian employees aged 55 years and above, as well as defense service personnel aged 50 years and above, are eligible to open an account under the Senior Citizens Savings Scheme (SCSS) offered by the Government of India.

The SCSS provides senior citizens with a competitive interest rate of 8.2% on their deposits, with a maximum deposit limit of Rs 30 lakh. Deposits made under this scheme have a maturity period of 5 years, with the option for account holders to extend for an additional three years.

Interest earned on deposits is paid out quarterly directly into the linked savings bank account of the senior citizens participating in the SCSS.