Senior Citizen Savings Scheme (SCSS) 2026 — Interest Rate, ₹30 Lakh Limit and Quarterly Income
If you want dependable income after retirement, SCSS is the most generous government scheme India offers — 8.2% interest, the rate locked for your full term, and roughly ₹20,500 a month on a ₹30 lakh deposit.
Short answer — what is SCSS and what is it paying in 2026?
The Senior Citizens' Savings Scheme (SCSS) is a five-year government scheme for resident Indians aged 60 and above, paying 8.2% per annum for the July–September 2026 quarter — the joint-highest small savings rate. You can deposit from ₹1,000 up to ₹30 lakh, and the interest is credited every quarter rather than compounded. A full ₹30 lakh deposit generates ₹61,500 a quarter, or about ₹20,500 a month of dependable income.
📑 What this guide covers
SCSS interest rate — Q2, FY 2026-27
1 July – 30 September 2026 · Paid quarterly · Joint-highest small savings rate alongside SSY
Next review: the Department of Economic Affairs notifies October–December 2026 rates around 30 September 2026. Note that a change affects new accounts only — the rate on your existing account is fixed at opening.
What is the Senior Citizens' Savings Scheme?
The Senior Citizens' Savings Scheme (SCSS) was launched by the Government of India in 2004 with a simple purpose — to give retirees capital safety and predictable quarterly income.
It is available at post offices and authorised banks, carries a sovereign guarantee, and has one feature that sets it apart from almost everything else: the rate applicable when you open the account stays fixed for the full five years. If the government cuts rates later, your income does not fall — which is not true of PPF.
Six things that define SCSS
- The highest government rate: 8.2%, ahead of PPF (7.1%), NSC (7.7%) and most bank FDs
- Rate lock: the opening rate applies for your entire five-year term
- Quarterly income: interest is paid out, not added to the balance
- ₹30 lakh ceiling: doubled from ₹15 lakh in Budget 2023
- Sovereign safety: no ₹5 lakh DICGC cap as with bank deposits
- Tax deduction: up to ₹1.5 lakh on the deposit (Section 123, formerly 80C)
One thing to be clear about — SCSS does not compound
Interest is calculated and paid out every quarter rather than being added to your balance. That makes SCSS an income product, not a wealth-building one. If you do not need the money immediately, move each quarterly payout into an RD, liquid fund or short FD — otherwise it sits in a savings account earning 3%.
Who can open an SCSS account?
| Category | Minimum age | Condition |
|---|---|---|
| Regular senior citizens | 60 years | No additional condition |
| Voluntary retirement / superannuation | 55 years | Account must be opened within one month of receiving retirement benefits |
| Retired defence personnel | 50 years | Within one month of receiving benefits, subject to specified conditions |
| NRIs | Not eligible | An account cannot be continued if the holder becomes an NRI |
| HUFs and institutions | Not eligible | Individual accounts only |
Joint accounts only with a spouse
A joint account can be opened only with your husband or wife, and the entire deposit is attributed to the first account holder. This also means the second holder can be under 60, as long as the first holder is eligible.
You can hold more than one account
Multiple SCSS accounts are allowed, including at different banks and post offices — but the combined deposit across all of them cannot exceed ₹30 lakh. Deposits must be in multiples of ₹1,000. Cash is accepted up to ₹1 lakh; above that, payment must be by cheque or transfer.
SCSS calculator — what will your quarterly income be?
Set your deposit and see the payout every quarter, every month and across the full term.
🧮 SCSS income calculator 2026
Calculated at 8.2% p.a. with quarterly payouts
🔒 The rate at opening is locked for the full five-year term
*At 8.2% p.a. with simple quarterly payouts. Interest is taxable at your slab rate.
Open the full SCSS calculator →How much income does each deposit generate? (at 8.2%)
| Deposit | Per quarter | Monthly equivalent | Per year | Over 5 years |
|---|---|---|---|---|
| ₹5,00,000 | ₹10,250 | ₹3,417 | ₹41,000 | ₹2,05,000 |
| ₹10,00,000 | ₹20,500 | ₹6,833 | ₹82,000 | ₹4,10,000 |
| ₹15,00,000 | ₹30,750 | ₹10,250 | ₹1,23,000 | ₹6,15,000 |
| ₹20,00,000 | ₹41,000 | ₹13,667 | ₹1,64,000 | ₹8,20,000 |
| ₹30,00,000 (maximum) | ₹61,500 | ₹20,500 | ₹2,46,000 | ₹12,30,000 |
| ₹60,00,000 (couple, 2 accounts) | ₹1,23,000 | ₹41,000 | ₹4,92,000 | ₹24,60,000 |
*The monthly figure is for comparison only — payouts arrive quarterly, not monthly. Tax at your slab rate applies on top.
SCSS interest rate 2026 and how the payout works
Current rate: 8.2% p.a. (July–September 2026)
This is the joint-highest small savings rate, matched only by Sukanya Samriddhi. The government reviews rates every quarter, but SCSS has held at 8.2% for a long run of quarters.
🔐 The rate lock is the real advantage
In PPF, a rate cut applies to your existing balance too. SCSS works differently: the rate on the day you open the account applies for the whole five years. If the next quarterly review drops the rate to 7.8%, you keep earning 8.2% until maturity.
But the rate resets on extension
The lock covers the original five years only. When you extend for three years, the rate prevailing on the maturity date becomes the locked rate for that block. So if rates are falling, compare FDs and POMIS before you extend rather than doing it on autopilot.
📅 When and how the interest arrives
- Paid quarterly on 31 March, 30 June, 30 September and 31 December
- The first payout is pro-rated from the opening date to the end of that quarter
- It is credited to your linked savings account or sent by ECS
- Unclaimed interest does not earn any further interest — use it or reinvest it
- After the holder's death, interest accrues at the post office savings rate from the date of death
Tax on SCSS, TDS thresholds and Form 121
This is SCSS's weak spot — the interest is fully taxable. There is no EEE treatment as with PPF or SSY, so run the tax numbers before you commit a large sum.
Two changes already in force in 2026
- Section 80C is now Section 123: with the Income-tax Act 2025 effective from 1 April 2026, the ₹1.5 lakh deduction on SCSS deposits sits under Section 123. The limit and conditions are unchanged.
- Form 15H is now Form 121: from April 2026, the declaration used to stop TDS is Form 121. Submit it at your bank or post office at the start of each financial year.
Deduction on deposit
Up to ₹1.5 lakh under Section 123 (formerly 80C), available only under the old tax regime, and claimable in the year the account is opened.
Tax on interest
The interest is added to "income from other sources" and taxed at your slab rate. There is no exemption on it.
₹50,000 interest deduction
Senior citizens get a separate deduction of up to ₹50,000 on interest income (formerly Section 80TTB), covering SCSS, FDs and savings accounts combined.
When does TDS apply?
| Situation | TDS threshold | What to do |
|---|---|---|
| Aged 60 and above | ₹1,00,000 interest a year | 10% TDS above it (20% without PAN) |
| Under 60 (VRS/defence) | ₹50,000 interest a year | TDS applies above this level |
| Total income below the taxable limit | Not applicable | File Form 121 each April and no TDS is deducted |
Worked example — what you actually keep on ₹30 lakh
Annual interest is ₹2,46,000. Subtract the ₹50,000 interest deduction and ₹1,96,000 remains taxable. A senior citizen's basic exemption is ₹3 lakh, so if pension and other income keep the total within the exemption limit, the tax can be nil — provided Form 121 is filed on time. Above that, tax applies at your slab.
How to open an SCSS account — 5 steps
SCSS accounts can be opened at any post office or authorised bank (SBI, PNB, BoB, Canara, HDFC, ICICI, Axis and others). In most places this is still a branch visit rather than an online process.
Choose the bank or post office
The rate is identical either way. Opening it where you already hold a savings account means the quarterly interest lands there automatically.
Fill in Form-1
Form-1 is the SCSS account opening application. Include nominee details, and your spouse's name if you want a joint account.
Attach the documents
PAN, Aadhaar, two passport photographs and age proof. Those retiring under VRS or from defence service also need the retirement certificate and proof of the date benefits were received.
Make the deposit
In multiples of ₹1,000, up to ₹30 lakh. Anything above ₹1 lakh must be by cheque or transfer, and a cheque deposit opens the account on the date it clears.
Collect the passbook and set up the credit
The passbook is issued immediately. Link your savings account for automatic interest credit, and set a yearly reminder to file Form 121.
The one-month window for VRS retirees
If you are between 55 and 60 and retiring under VRS or superannuation, the account must be opened within one month of receiving your retirement benefits, and the deposit cannot exceed those benefits. Miss that window and you wait until 60.
Maturity, extension and premature closure
📅 Three choices at the five-year mark
Withdraw everything
Principal returned in full, no deduction. If you leave the account unclosed after maturity it keeps earning, but only at the post office savings rate.
Extend by three years
Submit Form-4 within one year of maturity. Since the 2023 amendment, more than one three-year block is permitted.
Close and reopen
If rates have risen, closing and opening a fresh account can lock in the better rate — though the ₹30 lakh ceiling still applies.
The hidden benefit of extending
An extended account can be closed without any penalty once one year of the extension has passed. So extending does not tie you down for three years — you lock the rate and keep the flexibility.
🚪 What premature closure costs
| When you close | Deduction | Effect |
|---|---|---|
| Before 1 year | No interest at all | Interest already paid is recovered from the principal |
| Between 1 and 2 years | 1.5% of the deposit | ₹45,000 on a ₹30 lakh account |
| After 2 years | 1% of the deposit | ₹30,000 on a ₹30 lakh account |
| On the holder's death | No deduction | Nominee receives the full amount with interest to the date of death |
| One year into an extension | No deduction | An extended account can be closed any time after that |
SCSS vs senior citizen FD vs POMIS vs PPF
The four main options for post-retirement income, side by side.
| Criterion | SCSS 🟢 | Senior FD | POMIS | PPF |
|---|---|---|---|---|
| Interest rate | 8.2% | 7.0–7.75% | 7.4% | 7.1% |
| Maximum deposit | ₹30 lakh | No limit | ₹9 lakh single, ₹15 lakh joint | ₹1.5 lakh a year |
| Income payout | Quarterly | Monthly or quarterly option | Monthly | No regular income |
| Rate lock | Full 5 years | Full tenure | Full 5 years | Can change every quarter |
| Safety | Sovereign guarantee | DICGC up to ₹5 lakh | Sovereign guarantee | Sovereign guarantee |
| Tax on interest | Fully taxable | Fully taxable | Fully taxable | Fully tax-free |
| Deduction on deposit | Yes (Section 123) | Only 5-year tax-saver FDs | No | Yes (Section 123) |
| Best for | Anyone 60+ who needs steady income | Those who need flexibility | Covering monthly expenses | Long-term tax-free capital |
The sensible sequence
For most retirees the order is: fill the ₹30 lakh SCSS ceiling first (highest rate plus sovereign backing), then use POMIS to cover the monthly expense gap, and park whatever remains in senior citizen FDs or short-duration debt funds so you keep liquidity.
The ₹60 lakh couple strategy, and when to ladder
Two accounts, double the ceiling
The ₹30 lakh limit applies per person. If both spouses are 60+, separate accounts allow ₹60 lakh in total — ₹1,23,000 a quarter, roughly ₹41,000 a month.
- Open each account with a different primary holder
- Name each other as nominee and joint holder
- The interest is taxed separately in each person's hands
- Each can claim the ₹50,000 interest deduction independently
Laddering — don't always deploy at once
Depositing the full ₹30 lakh on one day locks you into one rate for five years. Splitting it across two or three quarters lets you capture an increase if rates move up.
- When rates are falling — deploy fully and lock the rate in
- When rates are rising — stagger the deposits
- Staggered opening dates also spread out your cash flow
- The ₹30 lakh ceiling still applies to the total
What to do with the quarterly payout
Because SCSS interest does not compound, money left sitting in a savings account earns only 2.5–4%. Whatever you do not need for expenses should be swept each quarter into an RD, liquid fund or short-term FD. Over five years, that single habit is worth lakhs.
8 common SCSS mistakes
Not filing Form 121
TDS gets deducted even when your income is below the taxable limit, and the refund takes months.
Fix: file it every AprilMissing the VRS one-month window
Those aged 55–60 must open within a month of receiving benefits, or wait until 60.
Fix: apply as benefits arriveLetting payouts idle in savings
Money that earned 8.2% then sits at 3% — a meaningful drag across five years.
Fix: sweep into an RD or liquid fundBreaking the account for cash
Closing before two years costs 1.5% — ₹45,000 on a ₹30 lakh deposit.
Fix: break FDs or small savings firstMissing the extension deadline
Without Form-4 within a year, the account is treated as closed and earns only the savings rate.
Fix: set a maturity reminderLeaving the interest out of the ITR
Interest is taxable even when no TDS is cut, and it shows up in your AIS.
Fix: declare it every yearSkipping the nomination
Without a nominee the family faces a lengthy legal process to claim the money.
Fix: nominate at openingPutting everything into SCSS
A sudden large expense leaves you paying a closure penalty to access your own money.
Fix: keep six months of expenses liquidNomination, joint accounts and claims after death
Nomination
- Add or change a nominee at opening or at any time later
- Multiple nominees are allowed, each with a share percentage
- A minor nominee needs a named guardian
Joint accounts
Permitted only with a spouse. The full deposit is attributed to the first holder, so both the tax and the ₹30 lakh ceiling count against them. If the first holder dies, the account can continue in the spouse's name provided they are eligible.
After a death
- No penalty on premature closure
- SCSS interest accrues up to the date of death
- Post office savings rate applies after that
- The nominee claims with a death certificate and KYC
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