Senior Citizen Savings Scheme Interest Rate

Understand how changes in SCSS interest rates impact your savings and retirement plans.
SCSS Interest Rate
4 min
14-May-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% (Q1 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.

Senior Citizen Savings Scheme interest rate 2024

The SCSS interest rate for the first quarter of FY 2024-2025 (April-June) is 8.2%. This is one of the highest interest rates offered by any fixed-income small savings scheme. SCSS rate of interest is reviewed quarterly by the RBI’s Monetary Planning Committee and revised according to the prevailing economic conditions. The interest rate prevalent on the day of opening an SCSS account gets locked in for the rest of the tenure. The interest amount gets credited quarterly on the first day of April, July, October, and January.

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 8.85% p.a. on their Fixed Deposits.

Historical trends in SCSS interest rates

Time period Senior Citizen Savings Scheme interest rate
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%

 

Benefits of SCSS

  • Guaranteed returns: SCSS is backed by a sovereign guarantee, making it a safe and risk-free investment avenue for seniors.
  • 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.
  • 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.
  • Quarterly interest payout: Periodic payouts help senior investors maintain a steady cash flow to meet their liquidity needs without withdrawing the entire corpus.
  • 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.

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.

Calculate your expected investment returns with the help of our investment calculators

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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.
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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.