How SCSS interest is calculated
This Senior Citizen Savings Scheme (SCSS) illustration assumes 8.2% per annum,
credited as simple interest every quarter — it is not compounded. The quarterly
interest is:
- Quarterly interest = Deposit × annual rate ÷ 4
So a ₹15,00,000 deposit at 8.2% earns ₹15,00,000 × 8.2% ÷ 4 =
₹30,750 every quarter, which works out to about ₹10,250 a month and
₹1,23,000 a year. Your principal stays the same throughout and is returned in full at
maturity, so over the 5-year term you receive ₹6,15,000 in interest on top of your deposit.
SCSS interest rate & key features (2026)
- Interest rate: enter the rate applicable when opening your account. The illustration uses 8.2% p.a., paid quarterly.
- Tenure: 5 years, renewable in successive 3-year blocks.
- Deposit limit: minimum ₹1,000, maximum ₹30,00,000 per individual (raised from ₹15 lakh in 2023).
- Eligibility: age 60+, or 55–60 under VRS/superannuation, or 50+ for defence retirees.
- Where to open: any post office or authorised bank (SBI, and other public/private banks).
Premature closure rules & penalty
SCSS allows premature closure, but a penalty applies depending on how long the account has run:
- Within 1 year: no interest is payable; any interest already credited is recovered from your deposit.
- After 1 year, before 2 years: 1.5% of the deposit is deducted.
- After 2 years, before 5 years: 1% of the deposit is deducted.
Turn on Estimate premature closure above for an original-term estimate.
The calculator does not take opening or closure dates; actual first and final interest payments
may be prorated. A monthly equivalent is not a monthly payout. Renewal-period penalties are not modelled.
Tax on SCSS
The SCSS deposit qualifies for a deduction of up to ₹1.5 lakh under Section 80C
(old regime only). The interest is fully taxable as per your slab, and banks/post offices deduct
10% TDS once eligible interest for a resident senior citizen with PAN crosses
₹1,00,000 in a financial year. The estimate assumes age 60+, no other deposits
at the payer and no non-deduction declaration. Eligible retirees below 60 should confirm the
applicable bank threshold. Submit a non-deduction declaration only when eligible. Check your
overall liability with our income tax calculator, and note that
seniors can also claim up to ₹50,000 of interest under Section 80TTB in the old regime.
SCSS vs other options
SCSS is one of the best fixed-income options for retirees, but it is worth comparing. A
fixed deposit offers flexible tenures and a monthly-income mode; the
5-year NSC is a tax-saving lump-sum option; and
PPF gives tax-free long-term growth. For steady income you can also
pair SCSS with the Post Office Monthly Income Scheme (POMIS).
If you want to draw down a mutual-fund corpus instead, see our
SWP calculator.
Frequently asked questions
What is the SCSS interest rate in 2026?
This SCSS calculator starts with an illustrative annual rate of 8.2%. Check the Ministry of Finance notification for your account-opening quarter and enter the applicable rate. The opening rate applies during the original five-year term; a renewal uses the rate applicable at the relevant maturity date. Interest is paid quarterly, not compounded.
How is SCSS interest calculated?
SCSS pays simple interest that is credited every quarter. The quarterly interest is Deposit × annual rate ÷ 4. For example, ₹15,00,000 at 8.2% earns ₹15,00,000 × 8.2% ÷ 4 = ₹30,750 every quarter, or ₹1,23,000 a year. The principal is not compounded — it is returned in full at maturity, and you receive the interest as regular income.
What is the maximum deposit in SCSS?
The maximum you can invest in SCSS is ₹30,00,000 (₹30 lakh), raised from ₹15 lakh in the 2023 Budget. The minimum is ₹1,000, in multiples of ₹1,000. The limit is per individual across all your SCSS accounts, so a senior couple can invest up to ₹60 lakh combined in separate accounts.
Who is eligible to open an SCSS account?
Resident individuals aged 60 or above can open an SCSS account. Eligible retirees aged 55–60 can open one within three months of receiving retirement benefits, subject to the scheme conditions and the retirement-benefit deposit limit. Special eligibility applies to eligible defence retirees from age 50. NRIs and HUFs are not eligible. Confirm your documents and eligibility with the deposit office.
What is the penalty for premature closure of SCSS?
During the original five-year term, closure before one year recovers interest already paid; closure from one year to before two years deducts 1.5% of principal; closure from two years to before maturity deducts 1%. The estimate covers only this original term, not renewal-period closure. Confirm date-specific settlement with your deposit office.
Is SCSS interest taxable, and is there TDS?
SCSS interest is taxable. This estimate assumes a resident senior citizen aged 60 or above with PAN and uses a ₹1,00,000 annual TDS threshold and 10% withholding on the full eligible interest when exceeded. Aggregate interest at the payer and eligible non-deduction declarations can change actual TDS. Early retirees below 60 should check their applicable bank threshold. In the old regime, eligible deposits fall within the overall ₹1.5 lakh Section 80C limit; the separate Section 80TTB interest deduction for seniors is capped at ₹50,000. TDS is not the final tax.
Can the SCSS account be extended after 5 years?
SCSS can be renewed in successive three-year blocks, subject to the scheme application requirements. The rate for each extension is the rate applicable on the relevant maturity date. This calculator models the original five years or one three-year extension, holding the entered rate constant for illustration; it does not predict future renewal rates.
SCSS vs Post Office MIS — which gives more income?
At illustrative annual rates of 8.2% for SCSS and 7.4% for Post Office MIS, SCSS earns more interest for the same deposit. SCSS pays quarterly and has age and retirement eligibility conditions; MIS pays monthly. Compare the actual rates available when opening an account, deposit limits, tax and access to your money rather than the rate alone.