Senior Citizen Savings Scheme (SCSS) 2026 - Interest, Eligibility & Features

Introduction

The Senior Citizen Savings Scheme (SCSS) is a government-backed savings plan designed specifically for individuals aged 60 and above who want a secure way to grow their savings with regular income. In 2026, this scheme continues to offer competitive interest rates and features that support financial stability for retired persons and eligible retirees, making it an important choice for post-retirement planning. SCSS combines guaranteed returns with tax advantages and flexible features tailored for senior investors.

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What Is the Senior Citizen Savings Scheme (SCSS)?

The Senior Citizen Savings Scheme is a fixed-income investment option introduced by the Government of India that provides regular interest income and high security for senior citizens. It is particularly suitable for people looking to preserve capital while earning reliable returns through quarterly payouts.

SCSS Interest Rate 2026

The interest rate for SCSS is reviewed every quarter by the Government of India and is applicable for new accounts opened during that quarter.

Latest Interest Rate Overview

Relevant Period

Applicable SCSS Interest Rate

FY 2025–26 (Apr–Jun 2025)

8.2% p.a.

FY 2025–26 (Jul–Sep 2025)

8.2% p.a.

FY 2025–26 (Oct–Dec 2025)

8.2% p.a.

FY 2025–26 (Jan–Mar 2026)

Expected 8.2%*

*While quarterly revisions are possible, many recent quarters have maintained the 8.2% rate, and this remains the expected benchmark into early 2026.

Interest is paid quarterly typically on 1st April, 1st July, 1st October, and 1st January directly to the investor’s account.

How SCSS Interest Is Paid and Calculated

Interest in SCSS is:

• Compounded quarterly and credited at fixed intervals.
• Based on the principal amount deposited and the applicable interest rate at the time of account opening.

Unlike some other schemes, once the interest rate is locked in at the time of account opening, it remains fixed throughout the 5-year tenure of that specific SCSS account.

Eligibility Criteria

SCSS has simple eligibility requirements:

Eligibility Aspect

Requirement

Age for Resident Individuals

60 years and above

Early Retirement Civilians

55–60 years, within one month of retirement benefits receipt

Early Retirement Defence Staff

50–60 years, with retirement benefits

Joint Account

Allowed with spouse only

NRIs & HUFs

Not eligible to open SCSS accounts

Key Features of SCSS

1. High and Regular Returns

SCSS typically offers some of the highest interest rates among small savings schemes, with an attractive rate of around 8.2% per annum in the latest period.

2. Government Guarantee

Returns from the scheme are backed by the Government of India, providing high security for retirement funds.

3. Quarterly Payouts

Interest is credited every quarter, offering a stable income stream for retirees.

4. Flexible Tenure

The standard tenure is 5 years, and investors can extend the account once for 3 more years after maturity.

5. Easy Accessibility

SCSS accounts can be opened at designated post offices and authorized banks across India.

6. Investment Limits

Minimum deposit is usually ₹1,000, and the maximum contribution limit is ₹30 lakh per individual.

Tax Treatment

• Section 80C Deduction:

The amount invested in SCSS qualifies for tax deduction under Section 80C of the Income Tax Act, up to the prescribed limit.

• Interest Taxability:

Interest earned on SCSS is fully taxable as per the investor’s applicable slab.

• TDS Rules:

Tax Deducted at Source (TDS) may apply on interest if it exceeds the threshold defined by the tax rules for that financial year.

Premature Withdrawal Rules

Although SCSS is a 5-year investment plan, premature closure is permitted with penalties:

When Closed

Impact on Interest / Penalty

Within 1 Year

No interest credited

After 1 Year, Before 2 Years

Principal reduced by 1.5%

After 2 Years, Before 5 Years

Principal reduced by 1%

This flexibility helps address emergencies when funds are needed before maturity.

Advantages of SCSS for Retirees

• A stable income stream via quarterly interest payouts helps to cover regular expenses.
• Guaranteed safety of investment backed by government oversight.
• Tax benefit on principal invested helps reduce taxable income.
• The extension option gives flexibility to continue earning interest beyond maturity.

Sample Interest Earnings Snapshot

For illustration, if you invest ₹10 lakh at the current SCSS rate of 8.2% per annum:

Quarterly interest:
= (₹10,00,000 × 8.2%) ÷ 4
= ₹82,000 ÷ 4
= ₹20,500 per quarter

Over a year, this yields about ₹82,000 a regular income without market risk.

Conclusion

The Senior Citizen Savings Scheme (SCSS) continues to be a reliable and safe option for retirees seeking predictable income and a secure post-retirement financial plan. With the interest rate around 8.2% per annum in recent quarters, government backing, quarterly payouts, and tax incentives, the scheme remains relevant and beneficial for senior investors in 2026. Understanding the eligibility, interest mechanism, tax implications, and withdrawal rules will help you use this scheme effectively to support your retirement goals.