ICICI Bank, headquartered in Mumbai, was established initially for the purpose of extending industrial credit. However, in the year 1994, it started offering diverse financial services. It is now considered to be among the ‘Big Four’ banks in the country.
Among its financial products, the government-backed Senior Citizen Savings Scheme ICICI bank offers retired individuals a chance to alleviate financial troubles even in the absence of a steady source of income. Under this scheme, there is hardly any risk to the capital invested alongside an assurance of guaranteed returns.
Features of the Senior Citizen Savings Scheme (SCSS)
Apart from the fact that Senior Citizen Saving Scheme ICICI offers a higher rate of interest in comparison to similar investment instruments, here are a few of its most notable features –
- The minimum deposit amount is capped at Rs.1000 with the maximum limit set at Rs.15 lakh.
- The tenure is 5 years which may be extended by another 3 years.
- The account may be opened individually or with a joint account-holder.
- The nominee can be more than 1 person.
- A penalty of 1.5% will be charged in case of premature withdrawal.
- Account may be opened in any public or private sector bank as well as at any post office.
Rate of Interest Available against SCSS ICICI Bank
The Finance Ministry declares the interest rate for Senior Citizen Saving Scheme ICICI prior to each quarter. The interest rate is subject to change as evident in the table mentioned below –
|Quarters||Rate of Interest|
|(FY 2020-21) July to September||7.4%|
|(FY 2020-21) April to June||7.4%|
|(FY 2019-20) January to March||8.6%|
|(FY 2019-20) October to December||8.6%|
|(FY 2019-20) July to September||8.6%|
|(FY 2019-20) April to June||8.7%|
|(FY 2018-19) January to March||8.7%|
|(FY 2018-19) October to December||8.7%|
|(FY 2018-19) July to September||8.3%|
|(FY 2018-19) April to June||8.3%|
During the maturity period, the applicable rate of interest will be the same as notified when the deposit was made. Throughout the term, i.e., 5 years, the rate of interest applicable to a particular account will remain the same.
For example, if the deposit under Senior Citizen Saving Scheme ICICI is made in September 2020, the applicable interest rate will remain 7.4% till September 2025. On the extension of tenure by another 3 years, the applicable rate of interest will be the one that was applicable at the time of renewal. The interest is paid out on a quarterly basis.
Eligibility to Invest into Senior Citizen Saving Scheme ICICI
Even though Senior Citizen Saving Scheme ICICI is necessarily for retired individuals who are 60 years or more, one can enjoy the benefits of this scheme if they comply with the criteria mentioned below –
- Individuals who have retired on superannuation or VRS can opt for the SCSS if they are 55 years or more of age. In this case, the funds will have to be invested in the Senior Citizen Savings Scheme within 1 month of receiving retirement benefits.
- Defence Services personnel aged 50 years or more can opt to park their savings in ICICI bank SCSS.
Nonetheless, one must note that the scheme excludes members of the HUF, Non-Resident Indians and Persons of Indian Origin.
Taxability of Senior Citizen Saving Scheme
Investors making deposits under the ICICI Senior Citizen Saving Scheme are entitled to enjoy tax benefit under Section 80C of the Income Tax Act, 1961. Under the provisions of this scheme, one can enjoy tax exemptions of up to Rs.1.5 lakh on their investments in a particular financial year.
The interest earned through the scheme, however, will be subject to taxation at depositor’s end. Tax will be deducted from the source if the interest amounts to more than Rs.50,000 in a financial year.
Comparison between Senior Citizen Saving Scheme and Fixed Deposit
|Senior Citizen Savings Scheme||Fixed Deposit|
|Rate of Interest
(as applicable on September 19th, 2020)
|7.4% (July to September 2020)||Ranges from 2.50% to 6.00%|
|Maturity Period||5 years||Ranges from 7 days to 10 years|
|Tax Exemptions On Returns||Taxable||Taxable|
|Tax Exemptions On Deposited Amount||Applicable||Applicable|
|Premature withdrawal||After 1 year (1.5% charge)||0.50% to 1.00%|
Documents Required to Open an ICICI Bank Senior Citizen Scheme Account
Individuals will need to submit Form A along with other supporting documents to start an account under the ICICI Bank Senior Citizen Saving Scheme. This Form can either be downloaded from the official website of ICICI bank or obtained from any of its branches. Alongside this Form, one will also need to submit supporting documents including address proof, age proof, identity proof, and payment instruments such as demand draft or cheque.
It is important to note that these documents will have to be self-attested, while the submission of PAN is mandatory. Apart from the main features of this scheme mentioned previously, a depositor retains an option to include the nominee in the course of opening an account or at a later stage. Those not complying with the eligibility requirements to opt for this scheme can look into other options like an ICICI Bank FD to park their savings.