SCSS 2026: Senior Citizen Savings Scheme Interest Rate & Calculator
SCSS interest rate is 8.2% for April–June 2026, paid quarterly. Max deposit ₹30 lakh. Eligibility, 80C deduction, TDS rules, premature closure penalties, and a worked payout example.
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Senior citizen savings scheme (SCSS) 2026: interest rate, calculator and rules
If you're retired and trying to figure out where to park a lump sum safely, SCSS is the one scheme you should understand before looking at anything else. It pays 8.2% per annum right now — more than most bank FDs, more than POMIS — and the deposit itself qualifies for a Section 80C deduction. For anyone over 60, that combination is genuinely difficult to match anywhere else.
What SCSS is
The Senior Citizen Savings Scheme is a government-backed deposit scheme run through India Post and designated PSU banks. You put in a lump sum, and the government pays you quarterly interest for five years. At the end of five years, there's an option to extend for another three. Your principal is fully protected throughout.
The scheme consistently pays above what PSU banks offer on comparable fixed deposits. That gap has narrowed over the years in both directions, but SCSS has held at 8.2% while 5-year PSU FDs sit at 6.5–6.8%. That's a real difference, not a rounding error.
Current SCSS interest rate (April–June 2026)
For Q1 FY 2026-27 (April–June 2026), the SCSS rate is 8.2% per annum, paid quarterly.
The Ministry of Finance reviews this every quarter. The rate has held at 8.2% for several consecutive quarters. Next review: 30 June 2026.
Quarterly payout formula: (Principal × 8.2%) ÷ 4
Interest lands on the first day of each quarter: 1 April, 1 July, 1 October, 1 January. If you open mid-quarter, the partial-period interest for the days from account opening to the next payment date is credited on that first day of the following quarter.
Who can open an SCSS account
The main criterion is age. Anyone who has turned 60 can open an account — no other conditions.
If you retired before 60, there's a narrower path. Retirement on superannuation (mandatory service-age retirement), VRS, or Special VRS between ages 55 and 60 makes you eligible, but you must open the account within one month of receiving your retirement benefits. Miss that window and you have to wait until you turn 60. The deposit also can't exceed the retirement benefits you received.
Defence retirees get a wider bracket — SCSS is available from age 50, under the same one-month-from-receipt condition.
Joint accounts are allowed with a spouse. The spouse's age doesn't determine eligibility; the primary account holder's age does. Nomination is mandatory.
NRIs cannot open new SCSS accounts. An account opened while resident may continue under general rules, but fresh deposits and new accounts are not allowed.
Maximum deposit limit
The cap is ₹30 lakh per individual across all SCSS accounts combined. You can hold multiple accounts at different post offices or banks, but the aggregate across all of them cannot cross ₹30 lakh.
Minimum deposit is ₹1,000, in multiples of ₹1,000. The deposit must be a single lump sum — you cannot add money to an existing SCSS account after it's opened.
The ₹30 lakh limit was doubled from ₹15 lakh in 2023 and hasn't changed since.
Where to open: any post office, or at SBI, PNB, Bank of Baroda, Canara Bank, Indian Bank, Union Bank, ICICI Bank, and HDFC Bank at SCSS-designated branches.
Quarterly payout: worked examples
Maximum deposit of ₹30 lakh
Principal: ₹30,00,000 at 8.2% p.a. Quarterly payout: ₹30,00,000 × 8.2% ÷ 4 = ₹61,500 per quarter
Annual income: ₹61,500 × 4 = ₹2,46,000/year
Over the 5-year tenure: ₹12,30,000 total interest, principal intact throughout. Extend for the additional three years at the same rate and you add another ₹7,38,000. Eight years, ₹19,68,000 in interest, ₹30 lakh back at the end.
More typical: ₹15 lakh
Principal: ₹15,00,000 at 8.2% p.a. Quarterly payout: ₹30,750 Annual income: ₹1,23,000
To model your own deposit, use the FD calculator with 8.2% and quarterly payout mode.
80C deduction on the deposit
The SCSS deposit qualifies for deduction under Section 80C, up to ₹1.5 lakh in the year of deposit. If you put in ₹15 lakh in one financial year, you claim ₹1.5 lakh of that — worth ₹45,000 in tax saved at the 30% bracket.
This only applies under the old tax regime. The new regime eliminates 80C (and most other deductions) in exchange for lower base rates. If you've opted for the new regime, there's no 80C benefit here.
Taxation on SCSS interest
The quarterly interest is fully taxable at your slab rate, added to income under "Income from Other Sources."
TDS kicks in if annual SCSS interest exceeds ₹1 lakh for account holders aged 60 and above. Below that, no TDS is deducted — but the income is still taxable and must go in your ITR. To block TDS even above the threshold, submit Form 15H to the post office or bank at the start of each financial year if your total income is below the exemption limit.
One relief that often gets missed: Section 80TTB lets seniors deduct up to ₹50,000 per year on combined interest income from savings accounts, FDs, and post office deposits including SCSS. A retiree earning ₹2,46,000 annually from a maxed SCSS account can bring the taxable interest down to ₹1,96,000 using 80TTB — under the old regime.
5-year tenure and extension
The tenure is five years from the date of opening. After that, you get one chance to extend for three more years. The extension window opens on the maturity date and stays open for one year after — so you have some time to decide, but not indefinitely.
The rate during the extension is whatever SCSS offers on the extension date, not your original rate. If rates have dropped, the extended period earns less. Worth checking the prevailing rate before committing to the extension versus reinvesting in a fresh account (which also gets the current rate, so in practice it's the same either way).
No further extensions are available after the three-year block ends. The account closes, principal returns, and you start fresh elsewhere.
Premature closure rules
| Timing | Penalty |
|---|---|
| Within 1 year | No interest paid; full principal returned |
| After 1 year, before 2 years | 1.5% deducted from deposit |
| After 2 years, before maturity | 1% deducted from deposit |
| During extension (after 1 year of extension) | No penalty |
Close a ₹20 lakh account at 18 months: you lose ₹30,000 (1.5% of ₹20 lakh). Close at 3 years: ₹20,000 lost (1% of ₹20 lakh). Whatever quarterly interest has already been paid to you stays with you — the penalty only hits the principal.
The extension period is more forgiving. Once you're past the first year of the extension, you can close without any deduction. If there's any chance you'll need liquidity around year 6–8, staying in the extension rather than reinvesting gives you that option.
SCSS vs POMIS vs bank FD for retirees
| Feature | SCSS | POMIS | Bank FD (5-yr PSU) |
|---|---|---|---|
| Interest rate | 8.2% | 7.4% | 6.5–6.8% |
| Payout frequency | Quarterly | Monthly | Quarterly or maturity |
| Max investment | ₹30L | ₹9L single / ₹15L joint | No cap |
| 80C deduction | Yes (up to ₹1.5L) | No | Only tax-saving FD variant |
| TDS threshold | ₹1L/yr for 60+ | No TDS | ₹50,000/yr |
| Premature closure | After 1 yr, with penalty | After 1 yr, with penalty | With penalty |
| Extension | Yes, 3 years once | Renewal at prevailing rate | No |
For anyone over 60 deploying a lump sum, SCSS should come first. The 80 basis-point advantage over POMIS alone adds ₹24,000/year on a ₹30 lakh deposit — that's not trivial. Bank FDs have no cap and are easier to open online, but paying 6.5–6.8% versus 8.2% has a real cost over five years.
POMIS makes sense in two situations: you're under 60 and need monthly income rather than quarterly, or you've already put ₹30 lakh into SCSS and still have a lump sum to place. The two schemes work well together if you have enough to fund both.
For a broader comparison, see best government savings schemes India 2026 and the POMIS guide. For the full 80C picture, see tax saving options under 80C.
Frequently asked questions
What is the SCSS interest rate for 2026?
8.2% per annum for April–June 2026 (Q1 FY 2026-27), paid quarterly on 1 April, 1 July, 1 October, and 1 January. The Ministry of Finance reviews this each quarter. The rate has held at 8.2% through several consecutive reviews; the next one is 30 June 2026.
What is the maximum deposit in SCSS in 2026?
₹30 lakh per individual, across all SCSS accounts combined. The limit was doubled from ₹15 lakh in 2023. You can open accounts at multiple post offices or banks, but the aggregate can't exceed ₹30 lakh. Each deposit is a single lump sum — topping up an existing account isn't allowed.
Who is eligible for SCSS?
Anyone 60 or above. Those who retired between 55 and 60 on superannuation or VRS can also open one, but only within one month of receiving retirement benefits, and the deposit can't exceed those benefits. Retired defence personnel qualify from age 50. NRIs cannot open new accounts.
Does SCSS qualify for Section 80C deduction?
Yes, under the old tax regime, up to ₹1.5 lakh in the year of deposit. Under the new tax regime, the 80C deduction isn't available — the new regime trades away most deductions for lower base rates. Which regime works better for you depends on your total income and other deductions.
How is SCSS interest taxed?
Quarterly interest is taxable at your slab rate. TDS applies if annual SCSS interest exceeds ₹1 lakh for account holders aged 60 and above. Submit Form 15H at the start of each year if your total income is below the exemption threshold to stop TDS deduction. Seniors can also use Section 80TTB to deduct up to ₹50,000 per year on combined deposit interest income.
Can I close my SCSS account before maturity?
Yes. Closing in the first year returns the full principal but no interest. After year one but before year two, the penalty is 1.5% of the deposit. After two years, it drops to 1%. During the extension period, closing after the first year of that extension carries no penalty at all — which makes the extension phase worth knowing about if you want flexibility down the line.
Interest rates verified for April–June 2026. Check the current quarter's rate at indiapost.gov.in or your bank before investing. This is not personalised financial advice.