HDFC Senior Citizen Savings Scheme
Introduction
Are you a Retired Person or aged more than 60?
If yes, after your retirement, do you have Lumpsum money in your Bank account?
Then, you might be worried about the various investment options you might not be aware of. But you might need a safest investment schemes that give you a regular income. Right?
Then, this article is for you!
The HDFC Bank, India’s largest private sector bank, launched a New scheme i.e. HDFC Senior Citizen Savings Scheme (SCSS). This scheme is a government-backed Investment plan designed especially for Senior citizens.
In this article, we will discuss the features, benefits, and eligibility of the HDFC Senior Citizen Savings Scheme, i.e., SCSS.
Let’s get started!!
Overview of HDFC Senior Citizen Savings Scheme
| S.No. | Particulars | Description |
|---|---|---|
| 1. | Scheme Name | HDFC Senior Citizen Savings Scheme |
| 2. | Launched by | HDFC Bank |
| 3. | Deposit Limits | Minimum Rs.1,000/- Maximum Rs.30 Lakhs |
| 4. | Mode of Investment | Single account (or) Joint account |
| 5 | Maturity Period | Minimum 5 years Maximum 8 years (If desired) |
| 6. | Interest rate | 8.20% p.a. |
| 7. | Interest Type | Simple Interest |
| 8. | Interest Payable Period | Quarterly basis on 1st April, 1st July, 1st October, 1st January |
| 9. | TDS | Applicable as per Income Act act, 1961 |
| 10. | Pre Mature Withdral | Allowed |
Before investing in this Senior citizen scheme, one should check their eligibility to deposit.
Senior Citizen Saving scheme Eligibility?
If an individual meets any one of the following categories can join in this HDFC Senior Citizen Saving scheme.
1. If you are a Resident Individual aged 60 years or older, i.e., especially Pensioners [or]
2. Retired Civilian Personnel aged between 55 to 60 on Superannuation, Voluntary Retirement Scheme (VRS), or Special VRS [or]
3. If you are a member of the Defence services aged between 50 and 60 years
(Excluding Civilian defense personnel) [or]
4. If you are a Spouse of a deceased Central government employee where the employee was 50 years of age or older at the time of death.
Now, let’s see how this scheme is beneficial to senior citizens.
What are the Benefits of the HDFC Senior Citizen Savings Scheme?
HDFC Senior Citizen Savings Scheme Features:
Firstly, let’s check how much money a person can deposit under this scheme.
1. HDFC Senior Citizen Savings Scheme Deposit Limits
Under this HDFC Senior Citizen Savings Scheme, a depositor can make a Minimum deposit of Rs.1,000 and any sum in multiple of Rs.1,000.
Eg: Rs.2,000 ; Rs.52,000 ; Rs.101,000 etc.,
The Maximum allowed deposit is Rs.30 lakh only.
Simply, you cannot deposit more than Rs.30 Lakhs int this scheme.
Here, the depositors can open this account through a Single Account or a Joint Account along with a spouse only.
2. How much Time should I hold this deposit?
The minimum time period the Senior citizens should hold the deposit is for a period of 5 years i.e. The Maturity period is for 5 years.
But you have one more option.
In case you want to extend your period of deposit even after the expiry of 5 years, you can extend it multiple times for a maximum period of 3 years.
3. How much interest will be paid?
Senior Citizen Saving Scheme Interest rate
The HDFC Senior citizen Depositors can earn a fixed interest rate of 8.20% p.a. However, the interest rates can change on a quarterly basis as notified by the Central Government.
However, you will receive interest on your Bank accounts on a quarterly basis on 1st April, 1st July, 1st October, and 1st January respectively.
Now let’s see few examples on this HDFC Senior Citizen Savings Scheme.
Example 1: If you deposit Rs.1,00,000
If you deposit Rs.1,00,000/- rupees in this HDFC Senior Citizen Savings Scheme, you will get Quarterly Rs.2,050. And for the entire period of 5 years, you will get Rs.41,000 in the form of interest.
Example 2: If you deposit Rs.5,00,000
If you deposit Rs.5,00,000/- rupees in this HDFC Senior Citizen Savings Scheme, you will get Quarterly Rs.10,250. And for the entire period of 5 years, you will get Rs.2,05,000 in the form of interest.
Example 3: If you deposit Rs.10,00,000
If you deposit Rs.10,00,000/- rupees in this HDFC Senior Citizen Savings Scheme, you will get Quarterly Rs.20,500. And for the entire period of 5 years, you will get Rs.4,10,000 in the form of interest.
Example 4: If you deposit Rs.20,00,000
If you deposit Rs.20,00,000/- rupees in this HDFC Senior Citizen Savings Scheme, you will get Quarterly Rs.41,000. And for the entire period of 5 years, you will get Rs.8,20,000 in the form of interest.
Example 5: If you deposit Rs.30,00,000
If you deposit Rs.30,00,000/- rupees in this HDFC Senior Citizen Savings Scheme, you will get Quarterly Rs.61,500. And for the entire period of 5 years, you will get Rs.12,30,000 in the form of interest.
From the above calculations, you can conclude that Senior citizens can get a 41% return on investment over the 5 years.
It means if you deposit Rs.100 rupees, you will get Rs.41/- extra in the form of interest under this scheme. In this way, the interest will be credited to your bank account every quarter.
Now, you can plan for any vacation, sir!
What do you say?
4. Which type of interest will be paid under this scheme?
Under this HDFC Senior Citizen Saving scheme, the type of interest that will be paid is Simple Interest only.
No Compounding interest will be paid under this scheme.
Logic:
Here, the logic is that the interest you are earning every quarter is paying out the depositor and not being held back by the bank itself. Therefore, it’s Simple Interest only.
However, in case the amount of interest you have earned on your deposit is reinvested further, then that is the case of Compounding Interest.
Let me say with a small example
If your deposited Rs.1 lakh, whatever the interest you earned is accumulated and such interest amount will be added to the deposited amount of Rs.1 Lakh and both 1,00,000 and 2,050 rupees will be invested in case of compounding interest.
Normally, if you deposit in Fixed Deposits, you might have seen options like a STDR in State Bank of India and also Re-investment option in other banks. That is the case of Compounding Interest.
It is to be noted that, the Compounding interest option is suitable when you have Lumpsum money but have no plan to withdraw it within a short period of time. Then, only it will works for you and it works at its best only.
Refer: TDR vs STDR in Fixed Deposit
5. Should I pay tax on this?
Senior Citizen Saving Scheme Tax Benefit
As per the latest Income Tax rules, w.e.f. 1st April 2025, all the Interest income earned by the Senior citizens during the financial year exceeds Rs.1,00,000 rupees, then, a TDS at the rate of 10% will be detected from the depositor. However, if you have not submitted your PAN details, they can deduct TDS @ 20%.
No TDS
In case the amount of interest income earned during the Financial year by the Senor Citizens is less than Rs.1,00,000, then No TDS will be deducted.
6. Can NRI deposit in this scheme?
The resident individuals, apart from as mentioned earlier, the individuals who are residing in the US, UK, Canada, or any other countries are not eligible to invest in this HDFC Senior Citizen Saving Scheme.
7. Whether the investment amount safe or not?
As per Deposit Insurance and Credit Guarantee Corporation (DICGC) guidelines, all the Bank deposits are secured up to Rs.5 Lakhs per bank account only. Therefore, it is better to diversify your fixed deposits in case you are depositing more than Rs.5 Lakhs.
Therefore, it is not advisable to hold money as a bulk investment in a single Bank account. If the banks liquidated or closed for any reason, then you will be paid with a Maximum of Rs.5,00,000 only even though you hold more than Rs.5 Lakhs.
8. I need money for an emergency; can I withdraw partially?
If you need an emergency amount from this HDFC Senior Citizen Saving scheme account either for your LIC Insurance Premium payment or for your Credit card outstanding payment or for any other purpose, then, you cannot withdraw partial amount from this scheme.
Say, if you have a deposit of Rs.1,00,000, but if you want Rs.30,000 or Rs.50,000 from your account, it is not possible.
But, you have an option. i.e. Pre-matured Withdrawl.
senior citizen saving scheme withdrawal
The Senior citizens cannot withdraw money partially but they can withdraw money completely before 5 years period. i.e. Pre-matured Withdrawl.
9. What are the documents required to open this senior citizen saving scheme?
To open this account, the HDFC account holders must submit
- HDFC senior citizen saving scheme account form
- Aadhar, self attested
- PAN, Self attested
- Passport-size photographs.
10. Will my money get doubled in this scheme?
Question: If I deposit Rs.1,00,000, when can it be doubled under the scheme?
Answer: If you deposit Rs.1,00,000, that amount cannot become Rs.2,00,000 under this scheme. Simply, your money cannot be doubled under this scheme.
To double your deposit, you need to follow a rule that will be published in my next articles.. So keep visiting for such kind of information. In that article, you will understand very clearly and how much time you need to double your money. Everything will be discussed in that article.
Thanks for Reading. 🙂
Frequently Asked Questions (FAQ’s)
I already have a Post Office Saving scheme account, shall I need to apply for this HDFC Senior Citizen Scheme again?
The Senior Citizens are not required to apply for this HDFC Saving scheme again if they have a Post Office Saving scheme account.
The reason is that has as mentioned, this Senior Citizen Saving scheme (SCSS) is the government backed scheme. All the popular public sector Banks had started receiving the money from the customers for this scheme. But HDFC Bank announced it late to its customers to accept deposits from the customers for this Senior Citizen Saving scheme.
