The Senior Citizen Savings Scheme (SCSS) is a government-backed 5-year deposit for people aged 60 and above that pays 8.2% a year, credited every quarter. You can invest from Rs 1,000 up to Rs 30 lakh at a post office or authorised bank. Deposits qualify for deduction under the old tax regime, but the interest is taxable.
For retirees who want a regular, safe income, the Senior Citizen Savings Scheme is hard to beat. It pays one of the highest rates among government schemes, the money is backed by the Government of India, and interest arrives every quarter. This guide explains who can invest, how much, and the rules on tax and early withdrawal.
SCSS at a glance
| Feature | Details |
|---|---|
| Interest rate | 8.2% a year (July to September 2026 quarter), paid quarterly |
| Interest payment dates | 1 April, 1 July, 1 October and 1 January |
| Minimum deposit | Rs 1,000, in multiples of Rs 1,000 |
| Maximum deposit | Rs 30 lakh per person across all SCSS accounts |
| Tenure | 5 years, extendable by 3 years at a time |
| Where to open | Post offices and authorised banks |
Key point: your rate is locked
The government revises small savings rates every quarter, but the rate on the day you open an SCSS account stays fixed for the full five years. That is why many retirees open accounts when rates are high. Rates for the October to December 2026 quarter are announced before the quarter begins.
Who is eligible
- Any resident individual aged 60 years or above.
- Retired civilian employees aged 55 to 60, if they invest within three months of receiving retirement benefits, up to the amount of those benefits.
- Retired defence personnel aged 50 and above, on the same conditions.
- You can open an account alone or jointly with your spouse. The whole deposit is counted in the first holder’s limit.
- NRIs and HUFs cannot invest.
How much income does it pay?
| Deposit | Quarterly interest at 8.2% | Yearly interest |
|---|---|---|
| Rs 5 lakh | Rs 10,250 | Rs 41,000 |
| Rs 15 lakh | Rs 30,750 | Rs 1,23,000 |
| Rs 30 lakh | Rs 61,500 | Rs 2,46,000 |
A couple can each invest Rs 30 lakh in separate accounts, for a total of Rs 60 lakh and about Rs 1.23 lakh of interest every quarter.
How to open an SCSS account
- Visit a post office or an authorised bank branch. Some banks also allow online opening for existing customers.
- Fill in the SCSS account opening form (Form A) and add a nominee.
- Submit Aadhaar, PAN, age proof and a photograph. Retirees under 60 should also submit proof of retirement benefits.
- Deposit by cheque or transfer if the amount is above Rs 1 lakh.
- Give your savings account details so interest is credited automatically.
Premature closure
| When you close | Penalty |
|---|---|
| Before 1 year | No interest. Any interest already paid is recovered from the principal. |
| After 1 year but before 2 years | 1.5% of the deposit |
| After 2 years but before 5 years | 1% of the deposit |
| On the death of the account holder | No penalty. Interest is paid at the SCSS rate till the date of death |
Extension after five years
You can extend the account for three years by applying within one year of maturity. You can extend it any number of times, three years at a time. The extended account earns the rate in force on the date of maturity, not your original rate.
Tax rules
- Deposits qualify for the Rs 1.5 lakh deduction under the old tax regime. There is no deduction in the new regime.
- Interest is fully taxable at your slab rate in both regimes.
- Banks and post offices deduct TDS when total interest from deposits exceeds Rs 1 lakh in a year for senior citizens. Submit Form 15H at the start of the year if your total income is below the taxable limit to avoid TDS.
- Senior citizens under the old regime can claim a deduction of up to Rs 50,000 on interest from deposits.
Check how your pension and interest are taxed in our income tax slab guide for FY 2026-27.
SCSS compared with other options for retirees
| Option | Rate | Payout | Limit |
|---|---|---|---|
| SCSS | 8.2% | Quarterly | Rs 30 lakh |
| Post Office Monthly Income Scheme | 7.4% | Monthly | Rs 9 lakh single, Rs 15 lakh joint |
| Bank FD for seniors | Varies by bank | Monthly or quarterly | No limit |
| PPF | 7.1%, tax-free | On maturity | Rs 1.5 lakh a year |
Also read our explainer on the Public Provident Fund and the Atal Pension Yojana.
Sources
- Senior Citizens’ Savings Scheme, 2019, and amendments, Ministry of Finance
- Department of Economic Affairs quarterly notifications on small savings rates
- India Post, Post Office Savings Schemes (indiapost.gov.in)
Last updated: 26 September 2026. Interest rates are revised quarterly.
Frequently asked questions
What is the SCSS interest rate now?
8.2% a year for accounts opened in the July to September 2026 quarter. Interest is paid every quarter and the rate stays fixed for five years.
What is the maximum limit in SCSS?
Rs 30 lakh per person across all SCSS accounts. A husband and wife can each invest Rs 30 lakh in separate accounts.
Is SCSS interest taxable?
Yes. Interest is taxable at your slab rate. TDS applies if total deposit interest exceeds Rs 1 lakh in a year for senior citizens, unless you submit Form 15H.
Can I close SCSS before 5 years?
Yes. Closing before one year forfeits interest, between one and two years attracts a 1.5% penalty on the deposit, and after two years the penalty is 1%.
Can people below 60 invest in SCSS?
Retired civilian employees aged 55 to 60 and retired defence personnel aged 50 and above can invest their retirement benefits within three months of receiving them.