Independent guide. Money Schemes is not a government website and does not take applications or payments. Apply only on the official portal, at a post office, a bank branch or a Common Service Centre.
The Senior Citizen Savings Scheme (SCSS) is a five year government deposit for people aged 60 and above, and for some early retirees, that pays 8.2% a year in quarterly instalments on a deposit of 1,000 rupees up to 30 lakh rupees. The rate is fixed for the full five years on the day you deposit, even if later quarters bring a different rate for new accounts.
The post office senior citizen saving scheme is offered at every post office, and the same senior citizens savings scheme rules apply at authorised banks. Below are the eligibility rules in full, how the quarterly payout works, what you lose by closing early, how the interest is taxed and the papers to carry. To see your own quarterly figure, try the SCSS calculator.
At a glance
Run by
Ministry of Finance, through post offices and authorised banksWho can join
Age 60 and above; retirees from 55 and retired defence staff from 50, with conditionsDeposit
1,000 rupees to 30 lakh rupees in total, in multiples of 1,000Interest
8.2% a year, fixed at deposit, paid every quarterTerm
5 years, extendable in blocks of 3 yearsTax
Deposit under 80C (old regime); interest is taxableAccount type
Single, or joint with spouse only
Who can open a senior citizen savings scheme account
- Age 60 or more on the day of opening: any resident individual.
- Age 55 to below 60: a person who retired on superannuation or under a voluntary or special voluntary retirement scheme, if the money is deposited within three months of receiving retirement benefits. The deposit cannot be more than those benefits.
- Retired defence personnel (not civilian defence staff) from age 50, within the same three month window.
- Spouse of a government employee who died in service may join under a special rule if conditions about age and benefits are met. Ask the post office to check your case.
Non-resident Indians and Hindu Undivided Families cannot open an account. A joint account is allowed only with your spouse, and the whole deposit counts against the first holder's 30 lakh ceiling.
SCSS scheme details: how much you can put in
Each account takes one deposit, in multiples of 1,000 rupees, with a minimum of 1,000. You may open more than one account, but all your SCSS accounts together cannot hold more than 30 lakh rupees. Cash is accepted up to 1 lakh rupees; above that, pay by cheque or transfer from a savings account.
For deposits above 10 lakh, India Post asks for proof of where the money came from, such as a bank statement, income tax returns, a property sale deed, a gift deed or a will. Keep these ready to avoid a second visit.
Senior citizen saving scheme interest rate and payout dates
The rate for accounts opened in October to December is 8.2% a year. Once you deposit, that rate stays with the account for all five years. Interest is paid quarterly, on the first working day of April, July, October and January. The first payment covers the days from your deposit to the end of that quarter, so it is usually smaller than the rest.
Interest can be credited automatically to your own savings account held at a post office or bank branch. Interest that you leave unclaimed in the SCSS account does not earn extra interest, so link a savings account at the time of opening.
Extension after five years
When the five years end, you may extend the account for a block of three years by applying within one year of maturity. This can be repeated for further three year blocks. The extended period earns the rate that is in force on the date of maturity, not your old rate. If you close an extended account within one year of the extension, 1 percent of the deposit is deducted; after one year, there is no deduction.
Closing early: what is deducted
| When you close | Effect |
|---|---|
| Before 1 year | No interest. Any interest already paid is recovered from the deposit. |
| After 1 year, before 2 years | 1.5 percent of the deposit is deducted |
| After 2 years, before 5 years | 1 percent of the deposit is deducted |
If the account holder dies, the account is closed and the money goes to the nominee or legal heir. SCSS interest runs until the date of death; after it, only the savings account rate applies. A spouse who is the joint holder or sole nominee and is eligible in their own right can ask to continue the account.
Tax on SCSS interest and TDS
The deposit earns an 80C deduction for old regime taxpayers, inside the overall 1.5 lakh rupees cap. The interest is fully taxable at your slab rate, whichever regime you choose. Tax is deducted at source when the interest paid to you in a financial year crosses the threshold for senior citizens in the Income Tax Act, currently 1 lakh rupees. Where total income stays under the taxable level, hand in Form 15H every April so no TDS is cut. Check the current threshold with the Income Tax Department, as it is set by each Finance Act.
Documents and steps to open
- Ask at the counter for the SCSS opening form.
- Attach two passport size photos and copies of Aadhaar and PAN.
- If you are between 55 and 60, or a retired defence person, add a retirement certificate and proof of the date and amount of retirement benefits.
- For more than 10 lakh, add a source of funds document.
- Fill the nomination and give your savings account number for interest credit.
- Pay by cash up to 1 lakh, otherwise by cheque or transfer, and collect the passbook.
Disadvantages of senior citizen savings scheme
The scheme suits many retired people, but know its limits before you lock money in:
- Interest is taxable, so the after tax return is lower for people in higher slabs.
- The 30 lakh ceiling covers all your SCSS accounts together.
- Payouts come every quarter, not every month. Those who need monthly cash often pair it with the Monthly Income Scheme.
- Money is locked for five years, with deductions for early exit.
- The rate is fixed for the term. That protects you if rates fall but holds you back if they rise.
SCSS compared with MIS and a bank senior FD
| Point | SCSS | Post office MIS | Bank senior citizen FD |
|---|---|---|---|
| Rate | 8.2%, fixed for 5 years | 7.4%, fixed for 5 years | Set by each bank, usually a little above its normal FD rate |
| Payout | Quarterly | Monthly | Monthly, quarterly or at maturity |
| Limit | 30 lakh per person | 9 lakh single, 15 lakh joint | No scheme limit |
| Age | 60, or 55 and 50 in special cases | Any adult | Usually 60 and above |
| 80C | Yes, old regime | No | Only a 5 year tax saving FD |
See senior citizen FD rates for how bank deposits work. Which mix fits depends on cash needs and tax, so weigh it with your bank, a post office official or a registered adviser.
Frequently asked questions
What is the senior citizen savings scheme interest rate?
8.2% a year for accounts opened in October to December. The rate is fixed for the five year term on the day you deposit.
What is the maximum limit in the post office senior citizen scheme?
30 lakh rupees in total across all your SCSS accounts. The minimum is 1,000 rupees, and deposits go in multiples of 1,000.
Is there a Pradhan Mantri senior citizen saving scheme?
There is no separate scheme by that name. The Ministry of Finance runs the Senior Citizen Savings Scheme through post offices and banks. The PM Vaya Vandana Yojana was a different pension plan and is no longer open to new buyers.
Can I open an SCSS account at 55?
Yes, if you retired on superannuation or under a voluntary scheme and you deposit within three months of receiving retirement benefits. The deposit cannot be more than those benefits.
Is SCSS interest tax free?
No. Interest is taxable. TDS is cut when interest crosses the senior citizen threshold, unless you give Form 15H and qualify for it.
Can I take monthly interest from SCSS?
No. SCSS pays interest every quarter. For monthly income, the Monthly Income Scheme pays every month.
Official sources
- India Post: savings schemes and current rateswww.indiapost.gov.in
- India Post: banking handbookswww.indiapost.gov.in
- Income Tax Departmentwww.incometax.gov.in
Rules, amounts and portals can change. Check the official source before you apply or deposit.