Senior Citizens’ Savings Scheme (SCSS) 2026
Quarterly guaranteed income for retirees at one of the highest government rates.
Rates for July–September 2026 (Q2 FY 2026-27) · Updated 27 September 2026What is Senior Citizens’ Savings Scheme (SCSS)?
The Senior Citizens’ Savings Scheme, governed by the SCSS Rules 2019 (amended in November 2023), is a five-year deposit for people aged 60 and above. It pays interest every quarter at a rate locked in on the day of deposit, making it a core fixed-income building block for retirees. The maximum investment is ₹30 lakh per individual, and a couple can each open accounts.
SCSS at a glance
| Particular | Details |
|---|---|
| Current interest rate | 8.2% p.a. (Jul–Sep 2026), fixed for the tenure |
| Interest payout | Quarterly — on 1 April, 1 July, 1 October and 1 January |
| Tenure | 5 years; extendable any number of times in 3-year blocks |
| Deposit | Min ₹1,000, multiples of ₹1,000, max ₹30 lakh (all SCSS accounts combined) |
| Account type | Single or joint with spouse only |
| Premature closure | Allowed any time with penalty |
| Where | Post offices and authorised banks |
| Deposit of retirement benefits | Within 3 months of receipt for eligible 50–60 age groups |
Government-notified terms for July–September 2026 (Q2 FY 2026-27). Verify the latest notification before investing.
Features & benefits of SCSS
The rate prevailing on the day of deposit applies for the entire 5 years, even if later quarters are cut.
₹30 lakh at 8.2% pays ₹61,500 every quarter.
Several accounts are allowed as long as the combined deposit stays within ₹30 lakh.
Extend for 3 years at the rate applicable on maturity — as many times as you want (post-2023 rules).
Quarterly interest can be credited to a savings account or auto-transferred into POMIS / RD.
Eligibility — who can invest?
- Individuals aged 60 years or above.
- Retired civilian employees aged 55–60 who opened within 3 months of receiving retirement benefits (VRS/superannuation).
- Retired defence personnel aged 50–60 (excluding civilian defence employees) under the same 3-month condition.
- Joint account only with spouse; the deposit is attributed to the first holder.
- NRIs and HUFs are not eligible.
How does SCSS work?
- Deposit a lump sum once — no additional deposits into the same account.
- Interest is calculated at the locked rate and paid on the first working day of April, July, October and January.
- Unclaimed quarterly interest does not earn additional interest — link it to a savings account.
- On maturity after 5 years, withdraw or extend for 3 years (extension request within 1 year of maturity).
Tax benefits of SCSS
| Stage | Tax treatment |
|---|---|
| Deposit | Deduction up to ₹1.5 lakh under Section 80C / Section 123 (old regime) |
| Interest | Fully taxable at slab rate |
| Senior-citizen relief | Section 80TTB deduction up to ₹50,000 on deposit interest (old regime) |
| TDS | Deducted if interest exceeds ₹1 lakh in a year for senior citizens; submit Form 15H to avoid if total income is below taxable limit |
Section 80C of the Income-tax Act, 1961 is Section 123 of the Income-tax Act, 2025 from tax year 2026-27. Deductions apply only in the old tax regime.
Withdrawal, premature closure & maturity rules
| Situation | Rule |
|---|---|
| Before 1 year | Allowed, but all interest paid is recovered from the principal |
| After 1 year, before 2 years | 1.5% of the deposit is deducted |
| After 2 years, before 5 years | 1% of the deposit is deducted |
| Extended account | Can be closed after 1 year of extension without penalty |
| Death of depositor | Account closed; interest at SCSS rate till death then savings rate; spouse (if eligible) may continue |
At maturity
| Option | What happens |
|---|---|
| Close | Principal credited to linked account |
| Extend 3 years | Form within 1 year of maturity; new rate = rate on the maturity date |
SCSS returns — worked examples
| Deposit | Quarterly interest @8.2% | Yearly interest | Total interest in 5 yrs |
|---|---|---|---|
| ₹5,00,000 | ₹10,250 | ₹41,000 | ₹2,05,000 |
| ₹10,00,000 | ₹20,500 | ₹82,000 | ₹4,10,000 |
| ₹15,00,000 | ₹30,750 | ₹1,23,000 | ₹6,15,000 |
| ₹30,00,000 (max) | ₹61,500 | ₹2,46,000 | ₹12,30,000 |
Interest is simple and paid out; it is taxable. Figures are before tax.
SCSS calculator
How to open / invest in SCSS
- Visit a post office or authorised bank with KYC and age proof.
- Fill the SCSS account opening form (Form A) with nominee.
- Deposit by cheque (above ₹1 lakh must be by cheque).
- Mention the linked savings account for quarterly interest credit.
- Submit Form 15H at the start of each FY if eligible to avoid TDS.
Documents required
- Age proof (Aadhaar, passport, PAN, birth certificate)
- Aadhaar and PAN
- Photographs
- Retirement benefit proof (for 50/55–60 age groups)
- Cancelled cheque of linked savings account
Important forms
| Form | Purpose |
|---|---|
| Form A | Account opening |
| Form B | Extension |
| Form E / closure form | Premature closure |
| Form 15H | Avoid TDS (senior citizens with nil tax liability) |
Advantages & limitations
- Highest rate for retirees, locked for 5 years
- Quarterly cash flow
- Government backing
- Deposit qualifies for the ₹1.5 lakh deduction
- Unlimited 3-year extensions
- Interest fully taxable
- ₹30 lakh ceiling
- Premature exit penalties
- Interest not compounded
- Not open to NRIs/HUFs
Mistakes to avoid
- Not submitting Form 15H/Form 15G in time, leading to TDS
- Leaving quarterly interest uncollected (no interest on unclaimed payout)
- Investing more than ₹30 lakh across accounts — excess refunded
- Waiting too long after retirement (55–60 age group gets only 3 months)
SCSS vs other saving schemes
| Scheme | Rate | Tenure | Minimum | Tax |
|---|---|---|---|---|
| SCSS | 8.2% p.a. | 5 years, extendable in 3-year blocks | ₹1,000 | EET — deduction on deposit, interest taxable |
| POMIS | 7.4% p.a. | 5 years | ₹1,000 | Taxable — no deduction |
| NPS | Market-linked | Till 60 (can stay invested up to 85) | ₹1,000 per year (Tier I) | EET — partly tax-free at exit |
| PO TD | 6.9% – 7.5% p.a. | 1, 2, 3 or 5 years | ₹1,000 | 5-year TD qualifies for deduction; interest taxable |
| Tax Saver FD | ≈5.5% – 7.75% p.a. (bank-wise) | 5 years (lock-in) | ₹100 – ₹1,000 (bank-wise) | Deduction on deposit; interest taxable |
Frequently asked questions
Can husband and wife both open SCSS?
Yes — each spouse who is eligible can invest up to ₹30 lakh in their own account, so a couple can invest up to ₹60 lakh.
Is the SCSS rate fixed?
Yes, for 5 years at the rate on the deposit date.
Can I extend SCSS more than once?
Under the amended 2023 rules, yes — in 3-year blocks.
Is SCSS interest tax-free?
No, it is taxable. The deposit itself qualifies for Section 80C / 123 in the old regime.
Can an NRI invest?
No. An account holder who becomes an NRI can continue till maturity.
Information is for education and comparison. Interest rates are notified by the Government every quarter and scheme rules can change — confirm with India Post, your bank, EPFO or PFRDA before investing. FinancePortal is not a financial or tax adviser.