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Find the quarterly income from an SCSS deposit at the current 8.2% rate, and see what extending the account or closing it early does to your returns.
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The Senior Citizens Savings Scheme (SCSS) is a government small savings scheme for retirees. You deposit a lump sum once, at a post office or an authorised bank, and it pays you interest every quarter for 5 years. At the end of the term the full deposit comes back to you — or you can extend the account in blocks of 3 years.
The rate is set by the Ministry of Finance every quarter. For 1 Oct 2026 – 31 Dec 2026 it is 8.2% a year, usually the highest of all small savings schemes. The rate on the day you open the account stays fixed for the full 5 years.
Because the government backs both the deposit and the interest, SCSS is a common core holding for retirement income: predictable, paid like a pension, and with no market risk.
Non-resident Indians and HUFs can’t open an account. If you retired early, the deposit can’t exceed your retirement benefits.
The minimum deposit is ₹1,000, in multiples of ₹1,000, up to ₹30,00,000. The limit is per person, across every SCSS account you hold at any post office or bank.
A joint account can be held with your spouse only. The whole deposit counts toward the first holder’s limit, so a couple who want to invest ₹30,00,000 each should open two single accounts, one in each name — if both are eligible.
When the 5-year term ends, you can extend the account for another 3 years — and again at the end of each block, as many times as you like. Before November 2023 only one extension was allowed; the rules now allow any number, including for accounts opened earlier.
All four use the current 8.2% rate; the last one adds one 3-year extension.
| Deposit | Quarterly income | Years | Total interest |
|---|---|---|---|
| ₹5 lakh (₹5,00,000) | ₹10,250 | 5 | ₹2,05,000 |
| Half the limit (₹15,00,000) | ₹30,750 | 5 | ₹6,15,000 |
| At the limit (₹30,00,000) | ₹61,500 | 5 | ₹12,30,000 |
| At the limit, extended once (₹30,00,000) | ₹61,500 | 8 | ₹19,68,000 |
Interest is simple, not compounded: every quarter pays exactly the same. Every lakh deposited pays about ₹2,050 a quarter.
You can close an SCSS account at any time, but closing before maturity costs you:
| Closed after (₹30,00,000 deposit) | Interest received | Penalty | Net gain |
|---|---|---|---|
| 9 months | ₹1,84,500 | ₹1,84,500 (all interest taken back) | ₹0 |
| 18 months | ₹3,69,000 | ₹45,000 (1.5% of the deposit) | ₹3,24,000 |
| 36 months | ₹7,38,000 | ₹30,000 (1% of the deposit) | ₹7,08,000 |
Switch on “Close early?” in the calculator to see the penalty for your own deposit and month. Apart from the first year, the interest you have already received is not taken back. If a holder dies, the account can be closed without any deduction.
| Option | Income | Term | Safety | Best for |
|---|---|---|---|---|
| SCSS | Quarterly, fixed | 5 years + 3-year extensions | Government-backed | Retirees wanting the highest safe rate |
| Post Office MIS | Monthly, fixed | 5 years | Government-backed | Monthly income, any age |
| Senior citizen bank FD | Monthly or quarterly | Flexible | Insured up to ₹5 lakh per bank | Flexible terms and amounts |
| RBI Floating Rate Bonds | Half-yearly, floating | 7 years | Government-backed | Rates that follow NSC |
Under the old tax regime, the deposit qualifies for a deduction of up to ₹1.5 lakh a year under section 123 of the Income-tax Act, 2025 (the old Section 80C). The new regime doesn’t allow it.
The interest is fully taxable. It is added to your income as “income from other sources” and taxed at your slab rate, year by year as it is paid: a ₹30,00,000 deposit adds ₹2,46,000 to your income every year.
The post office or bank deducts TDS at 10% when the interest it pays you in a financial year crosses ₹1 lakh (for senior citizens). TDS isn’t your final tax; any excess comes back as a refund when you file your return.
The interest itself is never exempt, but you pay no tax on it if your total income stays low enough. These rules are for FY 2026-27:
If your total tax for the year will be nil, give the post office or bank a self-declaration so it doesn’t deduct TDS. From 1 April 2026 this is Form 121, which replaced Form 15H. Submit it at the start of each financial year.
For 1 Oct 2026 – 31 Dec 2026 the Senior Citizens Savings Scheme pays 8.2% a year.
At 8.2%, every ₹1 lakh earns ₹2,050 a quarter. For larger deposits:
The deposit itself comes back in full at maturity.
You can close an SCSS account at any time, but closing before maturity costs you:
Example on ₹30,00,000: closing after 18 months costs ₹45,000, but you keep the ₹3,69,000 of interest already paid.
₹30,00,000 per person, across all your SCSS accounts.
Every quarter, on the first working day of April, July, October and January.
Yes. The interest is fully taxable at your slab rate, every year.
If you are eligible, SCSS usually pays more.
Many retirees hold both: SCSS for the higher rate, MIS to fill the months in between.
The account is closed and the money goes to the nominee or legal heirs, with no closure deduction.
Yes. It is a Government of India scheme, so both the deposit and the interest are backed by the government.
Resident individuals who meet one of these conditions:
NRIs and HUFs can’t open an account.
Yes, if you meet all of these conditions:
Miss the 3-month window and you have to wait until you turn 60.
Any payment you receive because you retired, including:
This matters only if you open the account before 60; at 60 or older, any savings can go in.
Yes, if the employee was 50 or older when they died in service.
This was added by the November 2023 amendment; before it, such spouses had to wait until they were eligible on their own.
No. Eligibility depends on the first holder alone.
If your spouse is eligible in their own right, two single accounts let you invest up to ₹30,00,000 each.
These people can’t open an account:
Yes, at the same or different post offices and banks.
Yes. After the 5-year term you can extend it in blocks of 3 years, as many times as you like.
This calculator assumes today’s 8.2% for every extension block, since future rates aren’t known.
Once 1 year has passed since maturity (or the end of a block), the extension option lapses.
SCSS pays simple interest on the deposit every quarter. The annual rate is divided by 4 and applied to the same deposit each quarter; nothing is added back to the principal.
With extensions, the term grows by 3 years per block and the same quarterly payout continues, at today’s rate. For an early closure, the calculator counts only the quarters fully completed, then applies the deduction for that month: the first-term bands, or the extension band measured from the start of the current block.
Quarterly income
Deposit × annual rate ÷ 4
Total interest
Quarterly income × 4 × years (first term + extension blocks)
Early closure
Deposit − deduction + quarterly income × completed quarters
Closure within 1 year
Deposit − interest already paid
SIPCafe's calculators and guides are for education and planning only and are not investment, tax or legal advice. Results are estimates based on the assumptions you enter; actual returns vary and are not guaranteed. Consider speaking with a qualified financial adviser before making investment decisions. SIPCafe is not a registered investment adviser and does not recommend any specific security, fund or scheme. All investments carry market risk; read a fund's or scheme's official documents carefully before investing.
Rates come from the latest official notification or the bank's own rate page, as shown on this page. The government revises small savings rates every quarter and banks can change theirs at any time, so confirm the current rate with the Post Office or your bank before you invest.