Short answer: The Senior Citizens Savings Scheme (SCSS) is a government-backed deposit for people aged 60 and above (and some early retirees) that pays 8.2% a year, credited every quarter, for October–December 2026. You can invest from ₹1,000 up to ₹30 lakh per individual for five years, extendable in blocks of three years. The deposit qualifies for the section 123 deduction under the old tax regime, but the interest is fully taxable.
Last updated: 13 October 2026.
This guide covers eligibility, limits, returns with worked examples, extension and premature closure rules, tax under the Income-tax Act, 2025, and how SCSS compares with other options for retirees.
Key features at a glance
| Feature | Rule |
|---|---|
| Interest rate | 8.2% a year (rate for Oct–Dec 2026; reviewed quarterly by the government) |
| Rate lock | The rate on the day you open the account applies for the full five years |
| Interest payout | Quarterly; unclaimed quarterly interest does not earn further interest |
| Minimum deposit | ₹1,000, in multiples of ₹1,000 |
| Maximum deposit | ₹30,00,000 per individual across all SCSS accounts (since 1 April 2023) |
| Tenure | 5 years; extendable in blocks of 3 years |
| Where to open | Any post office or authorised bank branch |
| Nomination | Allowed, one or more nominees |
Who can invest
- Individuals aged 60 or above.
- Retired individuals aged 55 to below 60 who invest their retirement benefits within the allowed window (now three months from receipt).
- Retired defence personnel aged 50 or above, subject to conditions.
- Accounts can be single or joint with a spouse only; in a joint account, the whole deposit is attributed to the first holder.
- NRIs and HUFs cannot open SCSS accounts.
These conditions are listed on bank pages such as SBI’s SCSS page. KYC needs Aadhaar and PAN; see our Aadhaar hub if your details do not match.
How much will you earn? Worked examples
| Deposit | Quarterly interest at 8.2% | Yearly interest | Total interest over 5 years |
|---|---|---|---|
| ₹5,00,000 | ₹10,250 | ₹41,000 | ₹2,05,000 |
| ₹15,00,000 | ₹30,750 | ₹1,23,000 | ₹6,15,000 |
| ₹30,00,000 | ₹61,500 | ₹2,46,000 | ₹12,30,000 |
Because interest is paid out, not compounded, the principal stays the same. A couple who are both eligible can each open accounts up to ₹30 lakh, giving a combined ceiling of ₹60 lakh and about ₹1,23,000 a quarter at the current rate. Interest is credited to your linked savings account; you can sweep it into a recurring deposit if you do not need it. Try different amounts in the simple savings calculator.
Extension after five years
Since a November 2023 amendment, you can extend the account in blocks of three years, more than once. The rate applicable is the one prevailing on the date of maturity or extension, not your original rate. Apply within the allowed period after maturity. If you close an extended account within one year of extension, a deduction applies; after one year of the extension there is no deduction.
Premature closure rules
| When you close | What happens |
|---|---|
| Before 1 year | The heaviest penalty: interest already paid can be recovered from the deposit or a deduction applies under the current rules; confirm at your branch |
| After 1 year but before 2 years | 1.5% of the deposit is deducted |
| After 2 years but before 5 years | 1% of the deposit is deducted |
| On the account holder’s death | Closed without penalty; the nominee or legal heir receives the proceeds |
Only one withdrawal is allowed, at closure; partial withdrawals are not permitted. If you need cash for a short period, compare the penalty with other options before closing.
Tax under the Income-tax Act, 2025
- Deposit: eligible for deduction under section 123 (the old section 80C), within the overall ₹1,50,000 limit, only if you choose the old regime.
- Interest: taxable every year at your slab rate under either regime.
- TDS: deducted if interest crosses the threshold for senior citizens. If your total income is below the taxable limit, submit the prescribed self-declaration to the bank or post office at the start of the year to avoid TDS.
- Senior-citizen interest deduction: the old regime has historically offered seniors an extra deduction on interest income; check the current section and limit in the new Act before you file.
For a 70-year-old with ₹30 lakh in SCSS and a modest pension, the ₹2,46,000 yearly interest may still leave total income below the taxable level under the new regime’s rebate; a person with a larger pension will pay tax at their slab. See our income tax hub for regime choice.
SCSS vs other options for retirees
| Option | Return | Liquidity | Tax on returns |
|---|---|---|---|
| SCSS | 8.2% fixed for 5 years | Penalty on early exit | Taxable |
| Post Office MIS | 7.4%, paid monthly | Penalty before 3 years / 5 years | Taxable |
| Bank FD (senior citizen) | Varies by bank | Penalty usually small | Taxable |
| Debt mutual funds | Market-linked | Usually redeemable any day | Taxable at slab |
Many retirees combine SCSS for steady income, a bank FD or liquid fund for emergencies, and some inflation-beating growth. Read our guide to the other government savings and pension schemes, the money moves to make in your 50s, and why inflation matters over a long retirement. Health cover is essential too; see our insurance hub.
How to open an SCSS account
- Visit a post office or an authorised bank branch (some banks allow online opening for existing customers).
- Fill the account opening form with nominee details.
- Submit Aadhaar, PAN, photograph and, for early retirees, proof of retirement and of the retirement benefits received.
- Pay by cheque or transfer (cash only for small amounts).
- Link your savings account for quarterly interest credits.
Fraudsters often target retirees with fake ‘higher-interest’ schemes. Invest only through a post office or bank, and read how to avoid financial frauds. You can check unregistered deposit schemes on RBI’s Sachet portal.
Need short-term funds without breaking your SCSS deposit? Compare loan offers from RBI-regulated lenders.
Borrowers above 55 have fewer options; see loan apps for borrowers aged above 55 before deciding.
Frequently asked questions
What is the SCSS interest rate for October–December 2026?
8.2% a year, paid quarterly. The rate you lock in at opening applies for the full five-year term.
Can I hold more than one SCSS account?
Yes, but the total across all your accounts cannot exceed ₹30 lakh. A spouse who is separately eligible can hold their own ₹30 lakh.
Is SCSS interest tax-free?
No. Interest is taxable at your slab rate. Only the deposit can be deducted under section 123, and only in the old regime.
Can I extend SCSS more than once?
Yes. Since November 2023 the account can be extended in blocks of three years, at the rate applicable on the extension date.
What happens to SCSS if the depositor dies?
The account is closed and the balance with interest is paid to the nominee or legal heirs. A spouse who is a joint holder or nominee and is eligible may be allowed to continue the account.
Sources
Disclosure: FundsTiger (Gatimaan Finance Advisors Pvt. Ltd.) is a loan marketplace and lending service provider for RBI-regulated lenders. Aparampaar Finance Pvt. Ltd. (Omozing), one of those lenders, is a related party of FundsTiger. This article is general information, not financial advice. Read your loan agreement and KFS before you decide.