Senior Citizen Savings Scheme (SCSS)

Senior Citizen Savings Scheme offers 8.2% interest rate in 2026, tax benefits, flexible withdrawals, and a 5-year tenure, ensuring secure returns.
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4 mins
24-July-2025

The Senior Citizen Savings Scheme (SCSS) is primarily for the senior citizens of India. This scheme offers a regular stream of income with the highest safety and tax saving benefits. It is a choice of investment for those over 60 years of age.

What is the Senior Citizen Savings Scheme (SCSS)?

The Senior Citizen Savings Scheme (SCSS), launched in 2004 under the post office savings umbrella, aims to offer financial stability to retirees through a secure, government-backed investment. Open to individuals aged 60 and above, SCSS accounts can be initiated at post offices or authorized banks, either singly or jointly. The scheme currently offers an interest rate of 8.2% (for the ongoing quarter), supports deposits up to Rs. 30 lakh, and has a 5-year tenure extendable by 3 years. While it qualifies for tax deductions under Section 80C, the interest earned is fully taxable.

Features of the Senior Citizen Savings Scheme

Feature

Details

Tenure

5 years

Interest rate

8.2% p.a. (2025-26)

Minimum investment

Rs. 1,000

Maximum investment

Rs. 30,00,000

Tax benefits

Up to Rs. 1.5 lakh under Section 80C

Compounding

Quarterly and Paid

 

  1. Guaranteed returns: As a government-backed instrument, the SCSS provides assured returns, offering a secure investment option compared to market-linked investments.
  2. Maturity period: The SCSS scheme has a fixed maturity period of 5 years, but individuals have the option to extend it for an additional 3 years by submitting Form B at concerned post office.
  3. Deposit limits: To open an account under the Senior Citizen Scheme, a minimum deposit of Rs. 1,000 is necessary, and there is a maximum deposit limit is Rs. 30 lakh.
  4. Prematurely withdrawal: If you prematurely withdraw your amount before completion of 1 year, you won't get any interest, if you withdraw it after 1 year but before 2 years, a 1.5% penalty is charged from the principal amount and if you withdraw after 2 years but before 5 years, a 1% penalty is charged.
  5. Nomination option: Account holders can nominate a beneficiary for the Senior Citizens Saving Scheme, so if the account holder passes away before the account matures, the nominee will receive the due amount.

SCSS latest interest rate

The Senior Citizen Savings Scheme (SCSS) is one of the most popular government-backed fixed income options in India for retirees and senior investors. It offers a high and secure interest rate that is reviewed quarterly by the Government of India. For the current period up to March 31, 2026, the SCSS rate remains 8.2% per annum, and this rate continues to be locked in for the entire tenure of an investment once the account is opened at that rate. This consistency provides predictable returns that many senior citizens prefer over fluctuating bank fixed deposit rates. Interest is paid periodically every quarter, helping investors plan regular income flows from their savings.

Below is a simple interest payout schedule showing when you can expect the quarterly interest credit once you have an active SCSS account:

Senior Citizen Savings Scheme Interest Payout Schedule

Quarter

Interest Payout Date

April – June

1st July

July – September

1st October

October – December

1st January

January – March

1st April


This schedule means that interest earned on your investment is credited on the first day of the month following each quarter, helping you receive income at regular intervals throughout the year.

How does the Senior Citizen Savings Scheme work?

  • Open an Sr Citizen Saving Scheme account with a single installment by contributing Rs. 1,000 up to Rs. 30 lakh.
  • The amount must be deposited within one month from the date of receiving the retirement benefit from the employer.
  • The retirement benefit includes:
    • Retirement or superannuation gratuity
    • Leave encashment
    • Retirement-cum-withdrawal benefit under the Employees’ Family Pension Scheme
    • Ex-gratia payments under a voluntary or special voluntary retirement scheme
    • Provident fund dues
    • Commuted value of pension
    • Savings element of Group Savings Linked Insurance Scheme payable by the employer on retirement
  • If the deposit exceeds the ceiling amount, the excess will be refunded immediately to the account holder.
  • Interest is credited to the account every quarter.
  • Interest can be withdrawn through ECS (Electronic Clearing Service) or auto credit mode via the post office.
  • The account can be closed prematurely anytime after the date of account opening.
  • The account can be extended for another three years from the date of maturity.
  • The extension must be done within one year from the date of maturity.

Calculation of Interest under the Senior Citizen Savings Scheme

Interest under the Senior Citizen Savings Scheme is compounded quarterly and paid out on the first day of April, July, October, and January. The key factors used in the interest calculation are:

  1. Principal or deposit amount
  2. Interest rate
  3. Maturity period

While the maturity period remains fixed, the deposit amount and interest rate may vary. The interest rate applicable at the time of investment is used to calculate the interest earned.

Benefits of investing in senior citizen savings scheme

The senior citizen savings scheme (SCSS) is a trusted government savings option designed to offer safety, steady income, and tax efficiency for retirees.

Before looking at each benefit in detail, it helps to understand why SCSS is often considered a core component of a senior citizen’s financial planning. From predictable returns to flexible withdrawal options, the scheme is built to balance income needs with capital protection. Here’s how each benefit supports that goal.

  • Tax benefits: Investments made in the senior citizen savings scheme qualify for tax deduction under Section 80C of the Income Tax Act, subject to the overall limit. This helps reduce taxable income while building a secure savings base. However, the interest earned is taxable as per the investor’s income slab, making it important to plan withdrawals and tax liability accordingly.
  • High-interest rate: One of the biggest attractions of SCSS is its comparatively high interest rate, which is usually higher than regular bank fixed deposits. The interest is revised quarterly by the government and paid out regularly, offering a reliable income stream. This makes SCSS especially suitable for retirees looking for consistent cash flow to manage day-to-day expenses.
  • Government-backed: SCSS is a government-backed savings scheme, which means it carries sovereign assurance. This backing significantly reduces the risk of default and provides peace of mind to investors. For senior citizens who prefer stability over market-linked returns, this assurance makes SCSS a dependable long-term savings choice without exposure to market fluctuations.
  • Low risk: Since SCSS is not linked to equity or market movements, it is considered a low-risk investment option. The returns are predictable, and the principal amount remains protected. This makes it ideal for senior citizens who want to safeguard their retirement corpus while earning steady interest, without worrying about volatility or sudden value erosion.
  • Simple investment process: Opening an SCSS account is straightforward and hassle-free. Senior citizens can invest through designated banks or post offices by submitting basic documents. The process is simple, transparent, and easy to manage, making it accessible even for those who prefer minimal paperwork and clear investment structures without complex rules or ongoing monitoring.
  • Unlimited extension of SCSS: After the initial five-year tenure, SCSS accounts can be extended in blocks of three years. There is no restriction on the number of times the account can be extended, as long as extension rules are followed. This flexibility allows senior citizens to continue earning interest for as long as they wish, aligning well with long-term retirement needs.
  • Early withdrawal: SCSS allows early withdrawal in case of urgent financial requirements, subject to certain conditions and penalties. While premature closure may reduce overall returns, the option provides much-needed liquidity. This feature ensures that senior citizens are not locked into the investment and can access funds during medical emergencies or other unforeseen expenses.

How to Open an Account under the Senior Citizen Savings Scheme?

Here are the steps to open an SCSS account with an authorised bank:

  1. Visit your nearest authorised bank branch and request an SCSS application form.
  2. Complete the application form with the required information.
  3. Attach the necessary documents to the form.
  4. Submit the completed application form, documents, and deposit money to the bank staff.
  5. The bank staff will process your application and open the SCSS account.

How to fill the Post Office SCSS application form?

  1. Enter the branch name of the post office.
  2. If you already have a savings account with the post office, enter the account number.
  3. In the 'To' section, specify the branch address of the Post Office.
  4. Attach a photograph of the accountholder.
  5. Write the account holder's name and select the SCSS option.
  6. Choose the account holder type: minor through guardian, person of unsound mind through guardian, or self.
  7. Select the account type: single, survivor, or all.
  8. Enter the deposit amount in both figures and words.
  9. If depositing by cheque, write the cheque number and date.
  10. Enter the accountholder's personal details.
  11. Tick the boxes at the end of the table for the provided documents.
  12. Fill in the SCSS details and tick the declaration box.
  13. The account holder must sign on both page one and two.
  14. Provide details of the nominee and add the account holder's signature to validate the nominee's information.

How to open SCSS Account in a bank offline

  1. Visit the nearest authorised bank branch and obtain the SCSS application form.
  2. Complete the application form by providing the required information.
  3. Attach the necessary documents.
  4. Submit the filled application form, along with the required documents and the deposit amount.
  5. The bank personnel will process the application and proceed to open the SCSS account.

Tax benefits under the SCSS

  • Individuals can claim tax deductions up to Rs. 1.5 lakh under Section 80C of the Income Tax Act, 1961, on their investments.
  • TDS is applicable if the total interest earned from all SCSS accounts exceeds Rs. 50,000 per annum.
  • For account holders below 60 years of age, TDS applies if interest income exceeds Rs. 10,000 annually.
  • With an 8.2% p.a. interest rate on an investment of Rs. 30 lakh, the estimated monthly income is approximately Rs. 20,500 per investor.

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Eligibility criteria for Senior Citizens Savings Scheme

You can open a Senior Citizen Savings Scheme (SCSS) account at a post office or authorized bank if you meet the following conditions:

  • Individuals aged 60 years or above.
  • Retired civilian employees aged between 55 and 60 years, provided the account is opened within one month of receiving retirement benefits.
  • Retired defense personnel aged between 50 and 60 years, with the same one-month investment condition post-retirement.
  • Accounts can be held individually or jointly with a spouse. In joint accounts, the entire deposit is attributed to the primary account holder.
  • Non-Resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not eligible.
  • Submission of PAN and Aadhaar is mandatory for account opening from 31st March 2023.

Documents required to open SCSS account

  1. 2 passport-size photo
  2. Identity proof (PAN card, Voter ID, Aadhaar card, or passport)
  3. Address proof (Aadhaar card or recent telephone bills)
  4. Proof of age (PAN card, Voter ID, birth certificate, or senior citizen card)

Note: All documents are required to be self-attested by the applicant.

Conclusion

Senior Citizen Savings Scheme (SCSS) offers a secure financial option for senior citizen. With a guaranteed returns the scheme ensures competitive interest rates, easy registration, and tax advantages. SCSS caters to the financial needs of senior citizen, promoting financial security.

For additional flexibility and potential for slightly higher returns, you can consider investing fixed deposit, which can provide flexible tenure and competitive interest rates.

Income Tax Sections & Saving Tips

Section 80C of Income Tax Act

Taxation

Post Office Saving Schemes

Savings plan

Term insurance plans for senior citizens

Life insurance for senior citizen

Frequently asked questions

What happens to SCSS after 5 years?

The maturity period for the SCSS scheme is 5 years. It can be extended for another 3 years, effectively bringing up the period to 8 years. If an individual is willing to extend such a period by 3 years, he/she shall submit Form B after duly filling it. An extension is allowed only once.

Is SCSS rate fixed?

This is one of the highest interest rates offered by a fixed-income small savings scheme. SCSS interest rate is reviewed quarterly and is subject to periodic change.

How many times can SCSS be renewed?

Your Senior Citizen Savings Scheme (SCSS) account may now be extended up to three times in consecutive blocks. Prior to now, at the conclusion of the five-year SCSS account term, you could only renew it once, for a period of three years.

What happens to SCSS after 8 years?

After 8 years, the SCSS account can be closed or extended for another three years. If not extended, the account will earn post-maturity interest at the rate applicable to savings accounts until it is closed.

Can a person have two SCSS accounts?

Yes, a person can have multiple SCSS accounts, but the total investment across all accounts should not exceed Rs. 30 lakh. Each account must be opened with a retirement benefit received or with fresh contributions within the specified limits.

What is the current interest rate for SCSS?

The current interest rate for SCSS is 8.2% per annum (as of June 2025), payable quarterly. This rate is subject to change and is periodically reviewed by the government.

Who is eligible for SCSS scheme?

Individuals aged 60 years or above are eligible for the SCSS scheme. Those aged 55 years or more but less than 60 years, who have retired on superannuation or under a voluntary retirement scheme, can also open an account within one month of receiving retirement benefits.

How to avoid TDS on SCSS?

To avoid TDS on SCSS interest, submit Form 15G (for individuals below 60 years) or Form 15H (for senior citizens) if your total income is below the taxable limit, preventing tax deductions at source.

What is the lock period of SCSS?

The lock-in period for SCSS is five years, but the scheme allows an extension of three more years upon maturity if desired.

Can I get monthly interest on SCSS?

No, SCSS does not provide monthly interest payouts. Interest is compounded quarterly and paid out every quarter.

Is SCSS only for retired employees?

No, SCSS is not exclusively for retired employees. Any Indian citizen aged 60 or above is eligible to invest in the scheme, whether retired or not.

Can a housewife open a senior citizen savings scheme?

Yes, a housewife can open a Senior Citizen Savings Scheme (SCSS) account if she is 60 years or older, as eligibility is based on age rather than employment status.

What is a 5-year senior citizen savings scheme?

The 5-year Senior Citizen Savings Scheme (SCSS) is a government-backed investment plan designed for individuals aged 60 and above, offering secure returns with a five-year lock-in period, extendable by three years.

Can I invest 30 lakhs in SCSS?

The maximum investment amount in SCSS is Rs. 30 Lakh. So yes you can invest Rs. 30 Lakh in SCSS.

What are senior citizen benefits in the budget?

The Union Budget 2025-26 introduced significant benefits for senior citizens. The income tax exemption limit was raised from Rs. 7,00,000 to Rs. 12,00,000, making annual incomes up to Rs. 12,00,000 tax-free for resident individual taxpayers. Additionally, the tax deduction limit on interest income for senior citizens was doubled from Rs. 50,000 to Rs. 1,00,000.

Furthermore, the government expanded its healthcare programme to provide citizens aged 70 and above with annual medical insurance coverage of Rs. 5,00,000 per family.

What is the interest rate for SCSS in 2025-2026?

The Senior Citizen Savings Scheme (SCSS) offers an interest rate of 8.2% per annum for the financial year 2025-2026. This rate is applicable from 1st Apr 2025 to 30th June 2025, with interest paid quarterly.

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