If you’re 60 or older and want the highest guaranteed, government-backed return available in India right now, the Senior Citizen Savings Scheme (SCSS) is it — currently paying 8.2% per annum, higher than the senior citizen FD rate at any large bank.
[Use the SCSS Calculator above ↑] — enter your deposit amount to see your exact quarterly payout.
SCSS is a government-backed savings scheme launched in 2004, specifically for retirees — offering the highest interest rate among all small savings schemes, paid out quarterly rather than compounded, with the security of a sovereign-backed instrument.
SCSS pays simple interest that is paid out to you each quarter, not added back to your deposit. The formula is: quarterly interest = deposit × 8.2% ÷ 4. The table below assumes 8.2% for all five years, which holds because the rate on the day you open the account stays fixed for the full tenure.
| Deposit | Quarterly interest | Yearly interest | Total interest over 5 years |
|---|---|---|---|
| ₹5,00,000 | ₹10,250 | ₹41,000 | ₹2,05,000 |
| ₹10,00,000 | ₹20,500 | ₹82,000 | ₹4,10,000 |
| ₹15,00,000 | ₹30,750 | ₹1,23,000 | ₹6,15,000 |
| ₹20,00,000 | ₹41,000 | ₹1,64,000 | ₹8,20,000 |
| ₹30,00,000 | ₹61,500 | ₹2,46,000 | ₹12,30,000 |
These figures are before tax. Interest is taxable at your slab rate, and TDS is deducted once your SCSS interest crosses ₹1,00,000 in a year, so a ₹30 lakh deposit paying ₹2,46,000 a year will have tax cut at source. Your first and last payouts may differ slightly depending on the date you open the account, so confirm the exact amounts with your branch.
The SCSS rate for the October–December 2026 quarter is 8.2% per annum — unchanged since April 2023, making this a rare period of sustained rate stability. For comparison, SBI and HDFC’s senior citizen 5-year FDs sit at roughly 6.7-7.05% (as of 8 October 2026, before any repricing after the RBI’s rate hike), about 1.2 to 1.5 percentage points below SCSS. On a ₹30 lakh deposit, that gap alone is worth real money over 5 years.
Importantly, whichever rate applies on the day you open your account is locked in for your entire 5-year tenure, regardless of how the rate moves for new depositors afterward.
SCSS allows premature closure, though with a penalty that depends on how long the account has run — typically ranging from 1% to 1.5% of the deposit. Sources disagree on the exact slab for closing between the first and second year (1% or 1.5%), and closing within the first year can mean losing the interest, so confirm with your post office or bank before assuming a specific penalty rate. According to a Business Standard explainer, once you have completed one year of an extended 3-year block there is no penalty for withdrawing, and no penalty applies when the account holder dies.
| Factor | SCSS | Bank Senior Citizen FD |
|---|---|---|
| Current rate | 8.2% | ~6.7–7.1% at large banks (varies by bank) |
| Backing | Government of India (sovereign) | DICGC insurance up to ₹5 lakh per bank |
| Payout | Quarterly, fixed | Varies — monthly, quarterly, or cumulative |
| Maximum investment | ₹30 lakh per individual | No cap, but DICGC only covers ₹5 lakh |
| Tenure | 5 years, extendable | Flexible, bank-dependent |
For amounts up to ₹30 lakh, SCSS is generally the stronger choice — higher rate, sovereign backing rather than bank-specific credit risk. For amounts beyond that, spreading across SCSS plus bank FDs (or FD laddering across multiple banks) becomes worth considering.
What is the current SCSS interest rate?
8.2% per annum for the October–December 2026 quarter, unchanged since April 2023.
What is the maximum amount I can invest in SCSS?
₹30 lakh per individual. A married couple where both are 60+ can each invest ₹30 lakh separately, for a combined household limit of ₹60 lakh.
Is SCSS interest tax-free?
No — SCSS interest is fully taxable at your income tax slab rate, though the deposit itself qualifies for a Section 80C deduction, and a separate Section 80TTB deduction (₹50,000) applies to interest income for senior citizens.
Can I extend my SCSS account after 5 years?
Yes — you can extend it in blocks of 3 years, multiple times, as long as you apply within a year of each maturity date.
Is SCSS better than a bank FD for senior citizens?
For amounts up to ₹30 lakh, SCSS generally offers a higher rate and sovereign backing rather than bank-specific credit risk — making it the stronger option for most retirees within that limit.
See also our FD interest rates guide and RD calculator for more government-backed savings options.
Sources: Department of Economic Affairs small savings rate announcement of 30 September 2026 (as reported by Business Today), India Post scheme details, and a Business Standard explainer on early closure. Verified October 2026. Rates are reviewed every quarter, so check the current rate before you deposit.
