Senior Citizen Savings Scheme (SCSS) Interest Rate 2024

Get the latest Senior Citizen Savings Scheme (SCSS) interest rate details. Learn about eligibility, investment limits, and benefits of SCSS, a safe savings option for senior citizens in India.
SCSS Interest Rate
4 min
28-October-2024

Senior Citizen Savings Scheme (SCSS) is a government-backed small savings scheme designed to offer financial security to retirees. The SCSS aims to help senior citizens secure a regular flow of post-retirement income and maintain their financial independence in their golden years. SCSS interest rates tend to be much higher than traditional safe investment options like bank fixed deposit and savings accounts. Here is a quick overview of the SCSS:

Senior Citizen Savings Scheme overview
Eligibility Seniors above the age of 60.Retired employees of 55-60 years who have retired early under a superannuation or Voluntary Retirement Scheme rules.Retired defence personnel above 50 years but below 60 years (provided they meet other terms and conditions).
Interest rate 8.2% (Q2 FY 2024-2025)
Tenure 5 years
Minimum deposit Rs. 1,000
Maximum deposit Rs. 30 lakh
Joint account Permitted (only with spouse)
Tax benefits Tax deduction up to Rs. 1.5 lakh u/s 80(C)
Premature withdrawal penalty 1% of the deposited amount will be charged as a penalty for premature withdrawals and closures before the completion of 1 year of investment.
Extension SCSS accounts can be extended in blocks of 3 years.


If you want to diversify your investment portfolio, you can consider a stable investment option like fixed deposit.

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Enjoy higher interest rate with Bajaj Finance Digital FD. Unlock returns of up to 8.65% p.a. by investing for 42 months via website and app.

Senior citizen savings scheme interest rate 2024

The Senior Citizen Savings Scheme (SCSS) offers an attractive interest rate of 8.2% per annum for the third quarter (October-December) of FY 2024-25. This makes SCSS one of the highest-yielding fixed-income small savings schemes available.

Please note that SCSS interest rates are reviewed quarterly and may change periodically. Interest is calculated and credited quarterly to your SCSS account.

Historical trends in SCSS interest rates

Time period

Senior Citizen Savings Scheme interest rate

October to December (Q3 FY 2024-2025) 8.2%
July to September (Q2 FY 2024-2025) 8.2%

April to June (Q1 FY 2024-2025)

8.2%

January to March (Q4 FY 2023-2024)

8.2%

October to December (Q3 FY 2023-2024)

8.2%

July to September (Q2 FY 2023-2024)

8.2%

April to June (Q1 FY 2023-2024)

8.0%

January to March (Q4 FY 2022-2023)

8.0%

October to December (Q3 FY 2022-2023)

7.6%

July to September (Q2 FY 2022-2023)

7.4%

April to June (Q1 FY 2022-2023)

7.4%

January to March (Q4 FY 2021-2022)

7.4%

October to December (Q3 FY 2021-2022)

7.4%

July to September (Q2 FY 2021-2022)

7.4%

April to June (Q1 FY 2021-2022)

7.4%

January to March (Q4 FY 2020-2021)

7.4%

October to December (Q3 FY 2020-2021)

7.4%

July to September (Q2 FY 2020-2021)

7.4%

April to June (Q1 FY 2020-2021)

7.4%

January to March (Q4 FY 2019-2020)

8.6%

October to December (Q3 FY 2019-2020)

8.6%

July to September (Q2 FY 2019-2020)

8.6%

April to June (Q1 FY 2019-2020)

8.7%

January to March (Q4 FY 2018-2019)

8.7%

October to December (Q3 FY 2018-2019)

8.7%

July to September (Q2 FY 2018-2019)

8.3%

April to June (Q1 FY 2018-2019)

8.3%

January to March (Q4 FY 2017-2018)

8.3%

October to December (Q3 FY 2017-2018)

8.3%

July to September (Q2 FY 2017-2018)

8.3%

April to June (Q1 FY 2017-2018)

8.4%

 

Interest calculation on Senior Citizen Savings Scheme

Interest on SCSS accounts is compounded quarterly and distributed on the first day of every quarter. The components used for interest calculation include:

  • The principal deposited
  • The applicable Senior Citizen Savings Scheme interest rate
  • The maturity period

Out of these, the maturity period (5 years) is the fixed component, while the other two are variables. The applicable SCSS interest rate for the given quarter is used for interest calculation on the deposited sum.

You can use an SCSS calculator tool online to estimate your total and quarterly returns. Let’s say you invest Rs. 30 lakh at the current SCSS scheme interest rate of 8.2% for the minimum 5-year tenure. Your quarterly interest income on the investment will be around Rs. 61,500.

Fixed deposit provides a fixed interest rate throughout the investment period. Interest rate on FD does not change with market fluctuations. NBFC’s like Bajaj Finance offers one of the highest rate of up to 8.65% p.a. on their Fixed Deposits.

Senior Citizen Saving Scheme (SCSS) vs Bajaj Finance Fixed Deposit

Features

SCSS

Bajaj Finance Fixed Deposit

Interest rate

8.2% (October-December 2024)

Up to 8.65% p.a. (For Senior Citizens)

Maturity period

5 Year

12-60 Months

Tax benefits (On investment)

Yes

No

Tax benefits (On returns)

No

No

 

Benefits of SCSS

1. Guaranteed returns

SCSS is backed by a sovereign guarantee, making it a safe and risk-free investment avenue for seniors.

2. High interest rates

Seniors can earn more on their invested corpus with high SCSS interest rates. Currently, SCSS offers a high interest rate of 8.2% (Q1 2024-2025), which is higher than traditional safe investment options like bank fixed deposit and savings accounts.

3. Tax benefits

Apart from better earnings, SCSS also offers lucrative tax breaks. Seniors can claim a tax deduction of up to Rs. 1.5 Lakhs u/s 80(C) for their SCSS investment.

4. Quarterly interest payout

Periodic payouts help senior investors maintain a steady cash flow to meet their liquidity needs without withdrawing the entire corpus.

5. Unlimited extension

The latest SCSS rules allow multiple 3-year extensions after the 5-year tenure. In other words, seniors can continue enjoying the high SCSS interest rates and all other benefits for extended periods.

Features of SCSS

1. Guaranteed safety and returns

The Senior Citizen Savings Scheme (SCSS) is a government-backed program, offering investors complete security for their principal investment. Upon reaching maturity, you're guaranteed to receive the full amount you deposited along with accrued interest.

2. Regular interest payments

SCSS account holders earn interest on their initial deposit at a rate determined by the government. Effective from January 1st, 2024, interest is calculated from the date of deposit up to the next quarter end (March 31st, June 30th, September 30th, or December 31st). Thereafter, interest is compounded quarterly and credited to your account on the first day of April, July, October, and January.

3. Flexible deposit options

Deposits can be made in cash for amounts under Rs. 1 lakh. For larger deposits exceeding Rs. 1 lakh, payment should be made via cheque.

4. Extended tenure

The SCSS offers a standard maturity period of 5 years. However, you have the flexibility to extend it for an additional 3 years by submitting an application within the last year of the initial term.

5. Nomination facility

Account holders can nominate a beneficiary to receive the accumulated amount in case of their demise. Nominations can be made during account opening or at a later date.

6. Premature closure

While early account closure is permitted, it's subject to certain penalties:

  • Closure before one year: The interest earned will be deducted from the principal amount.
  • Closure after one year but before two years: A penalty of 1.5% of the principal amount will be applied.
  • Closure after two years: A penalty of 1% of the principal amount will be applied.

Conclusion

The Senior Citizen Savings Scheme is ideal for individuals aged 60 years and above looking to park their surplus savings in a safe investment instrument and earn stable returns. If you are a retiree seeking a steady post-retirement cash flow, you can benefit from SCSS interest rates, which are higher than regular bank FDs and quarterly interest payments. This regular cash flow can create a dependable source of income to help cover your living expenses, medical bills, and other financial needs in the golden years.

Documents required to open an SCSS account

To open a Senior Citizen Savings Scheme (SCSS) account, you will need the following documents:

  • Two passport-sized photographs
  • Proof of identity (e.g., PAN card, Aadhaar card, Voter ID, passport)
  • Proof of address (e.g., Aadhaar, landline bill)
  • Proof of age (e.g., birth certificate, PAN card, Voter ID)

SCSS maturity period

The Senior Citizen Savings Scheme (SCSS) matures after 5 years from the date of account opening. However, account holders can extend the account in increments of three years after maturity. To extend, an application must be submitted for each three-year block.

The extension request should be made within one year of the SCSS account’s maturity date or within one year of the end of each subsequent three-year period. The extension will be counted from the date of maturity or the end of each block period, regardless of when the extension request is submitted.

Tax implications of the Senior Citizen Savings Scheme (SCSS)

Investments in SCSS are eligible for tax benefits as follows:

  • The principal amount deposited qualifies for a tax deduction of up to Rs. 1.5 lakh per year under Section 80C of the Income Tax Act, 1961.
  • Interest earned on SCSS is taxable based on the individual’s applicable tax slab. If the annual interest exceeds Rs. 50,000, Tax Deducted at Source (TDS) applies to the interest amount, with this TDS limit effective from Assessment Year 2020-21.

Premature withdrawal of SCSS

You may withdraw your Senior Citizen Savings Scheme (SCSS) deposit anytime after opening the account, though penalties apply.

  • Before 1 Year: No interest is payable, and any interest already credited will be deducted from the principal if the account is closed within the first year.
  • Between 1 and 2 Years: A penalty of 1.5% of the deposit amount will be deducted from the principal for closures after one year but before two years.
  • Between 2 and 5 Years: A 1% deduction from the principal is applied if the account is closed after two years but before the five-year maturity.

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Frequently asked questions

Is the SCSS interest rate fixed for 5 years?
No. SCSS interest rates are revised by the government every quarter. However, once the investment is done, the interest rate prevalent on the day of opening the account gets locked in for 5 years.
Is the interest rate locked for SCSS?
When you make an SCSS investment, the interest rate remains the same throughout the investment tenure,
Is SCSS rate fixed?
SCSS interest rates are revised by the government every quarter according to the prevalent economic conditions.
Will SCSS interest rate increase in 2024?
The SCSS interest rate has not been revised since the previous quarter. Currently, the interest rate for SCSS (Q1 FY 2024-2025) stands at 8.2%. The government may revise it in the next quarter.
Is senior citizen saving scheme interest tax free?

No, the interest earned on your SCSS account is taxable according to your tax bracket. There's no tax exemption on this income. However, if the total interest you earn in a financial year is less than Rs. 50,000, no Tax Deducted at Source (TDS) is applied.

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Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.