SCSS Scheme

Senior Citizen Savings Scheme offers 8.2% interest rate in 2025, 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 ₹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) offers an interest rate of 8.2% per annum for the second quarter of the financial year 2025–26. This rate is valid from July 1, 2025, to September 30, 2025.

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

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 Senior Citizen Savings Scheme

The Senior Citizen Savings Scheme (SCSS) offers several benefits:

  1. Ease of access: Open an SCSS account at any authorized bank or post office.
  2. Competitive returns: Enjoy an attractive annual interest rate of 8.2% w.e.f 01.04.2025 to 30.06.2025.
  3. Tax benefits: SCSS interest is exempt from income tax up to a certain limit.
  4. Early withdrawal: Premature withdrawal is allowed in case of medical emergencies with a penalty.

For a higher interest rate on your investment, you can consider Bajaj Finance Fixed Deposit. They offer interest rates up to 7.30% p.a. on their fixed deposits.

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 for SCSS

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

Section 80CCC of Income Tax Act

Taxation

Post office tax saving scheme

What is cess on income tax

Marginal rate of tax

Deferred tax liability

Exempt exempt exempt in income tax

Exemptions under new tax regime

How to save tax for salary above 10 lakh

How to save tax for salary above 20 lakh

How to save tax for salary above 30 lakh

How to save tax for salary above 50 lakh

How to save tax for salary above 9 lakh

How to avoid tax on savings account interest

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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