SCSS Calculator

Senior Citizen Savings Scheme — The Best Post-Retirement Fixed Income Option

The Senior Citizen Savings Scheme (SCSS) is a government-guaranteed savings instrument exclusively for individuals aged 60 and above. It currently offers 8.2% per annum (Q1 FY 2025-26), paid quarterly — the highest interest rate available on any government-backed fixed-income instrument at this tenure.

Individuals who have opted for voluntary retirement (VRS) can open SCSS at age 55 if they do so within one month of receiving retirement benefits. Retired defence personnel can open the account at age 50. These are the only exceptions to the age-60 rule.

Deposits are accepted in multiples of ₹1,000. The maximum limit was raised from ₹15 lakh to ₹30 lakh per individual in Budget 2023. A married couple where both are eligible can each hold ₹30 lakh — total ₹60 lakh in SCSS.

Tenure, Interest Payout, and Premature Closure

The base tenure is 5 years. At maturity, it can be extended once for an additional 3 years — total 8 years. The extension must be applied for within 1 year of maturity. After the 8-year block, no further extension is possible, and the corpus is returned.

Interest is paid quarterly on 1st April, 1st July, 1st October, and 1st January. This quarterly payout structure makes SCSS ideal for retired individuals who need regular income — unlike FDs that may pay monthly but at lower rates.

Premature closure is allowed after 1 year. Between 1–2 years, a 1.5% penalty on deposit is deducted. After 2 years, the penalty is 1%. In the case of the account holder's death, the account can be closed by the nominee/legal heir without penalty.

TDS on SCSS — Section 194A

TDS is deducted at 10% if the total interest from SCSS in a financial year exceeds ₹50,000. This threshold applies specifically to senior citizens (general threshold is ₹40,000). If PAN is not provided, TDS is 20%. Submit Form 15H at the start of each financial year if your total income is below the basic exemption limit to avoid TDS entirely.

SCSS interest is fully taxable as income from other sources — added to total income and taxed at the applicable slab rate. There is no special exemption on the interest itself (unlike PPF). The scheme's value is in the high guaranteed rate and sovereign guarantee, not in tax-free status.

For ₹30 lakh in SCSS at 8.2%, annual interest = ₹2,46,000. Quarterly payout = ₹61,500. At 20% slab, tax on ₹2.46 lakh = ₹49,200/year. Net post-tax annual income = ₹1,96,800 (₹16,400/month) — still significantly better than most bank FD rates on a post-tax basis.

SCSS vs PMVVY vs Bank FD — How They Compare

SCSS, PMVVY (Pradhan Mantri Vaya Vandana Yojana), and senior citizen FDs are the three main options for risk-free retirement income. PMVVY closed for new subscriptions on 31 March 2023, making SCSS the primary government-backed choice. Bank FDs for senior citizens offer 7–7.75% at most institutions, meaningfully lower than SCSS's 8.2%.

For a retiree with a large corpus to deploy, the strategy is typically: max SCSS at ₹30 lakh per person (jointly ₹60 lakh for a couple), then ladder FDs for the rest with some allocation to balanced advantage funds for inflation protection. SCSS handles the core income need; other instruments handle growth and buffer.