Senior Citizens' Savings Scheme (SCSS): rates, limits and how to open one

Who can open an SCSS account

• Residents aged 60 or above.
• Retired people aged 55 to 60 who opened the account within a set period after receiving their retirement benefits, typically one month, under voluntary or superannuation retirement.
• Retired defence personnel aged 50 and above, subject to the same condition on timing.
• A joint account is allowed with a spouse only, and the first holder's age decides eligibility.
• Non-resident Indians and Hindu Undivided Families cannot open one.

How much you can put in

At the time of writing, the minimum deposit is ₹1,000, in multiples of ₹1,000, and the maximum is ₹30 lakh per person across all SCSS accounts they hold. A couple can each hold their own accounts, so together they can invest up to the limit twice. The deposit is made once when you open the account; you cannot keep adding to it, though you can open more accounts within the overall limit.

Interest: rate and payout

The government sets small savings rates every quarter, but an SCSS account keeps the rate that applied on the day it was opened for its whole five-year term. For October to December 2026 the rate was 8.2% a year at the time of writing; check the current quarter's notification before you invest.

Interest is paid out every quarter, on fixed dates, into your savings account. It is not compounded within the scheme, which suits people who need a regular income. At 8.2%, ₹30 lakh earns about ₹2,46,000 a year, or about ₹61,500 a quarter, before tax.

Tenure, extension and early closure

An SCSS account runs for five years. At maturity you can extend it for a further three years, at the rate applicable at the time of extension, by applying within the permitted window.

You can close it early, but at a cost under the rules at the time of writing. Closing within the first year generally means any interest already paid is recovered from the principal. Closing after one year but before two years deducts 1.5% of the deposit, and closing after two years deducts 1%. On the death of the account holder the account can be closed without penalty.

Tax treatment

Deposits in SCSS have qualified for the deduction known as section 80C, up to its overall limit, but only for people who choose the old tax regime. The interest is fully taxable at your slab rate in either regime. Tax is deducted at source (TDS) when the year's interest crosses the threshold that applies to senior citizens; if your total income is below the taxable limit, you can submit Form 15H to the bank or post office to avoid TDS.

Under the old regime, senior citizens can also claim a deduction on interest from deposits, historically under section 80TTB, which now sits within section 153 of the Income-tax Act, 2025. Check the current limits and which regime you are in before counting on it.

How to open one

• At a post office or an authorised bank branch; many banks also offer SCSS through net banking for existing customers.
• Fill in the account opening form, with KYC documents: Aadhaar, PAN, proof of age and photographs.
• If you are between 55 and 60, add proof of retirement and of when you received the retirement benefits.
• Pay by cash for small amounts or by cheque for larger ones, and add a nominee.

SCSS or a bank FD?

Senior citizens also get a higher rate on bank fixed deposits, so the choice depends on the rates at the time and your needs. SCSS is backed by the government with no upper limit on that backing, while bank deposits are insured by DICGC up to its limit per depositor per bank. SCSS pays quarterly and has a fixed five-year term; an FD can be shorter, longer, cumulative or paying monthly, and early withdrawal terms differ by bank.

Many retirees use both: SCSS for a core of steady quarterly income, and FDs or other options for the rest and for money they may need sooner.

A worked retirement example

Say a 62-year-old couple has ₹50 lakh from retirement benefits and savings. Each opens an SCSS account of ₹15 lakh, which at the illustrative 8.2% gives the household about ₹61,500 a quarter, or roughly ₹20,500 a month on average, with the rate fixed for five years. They keep ₹5 lakh in a savings account or sweep FD as an emergency fund and put the remaining ₹15 lakh in bank FDs of different tenures, so some money matures every year.

The arrangement gives a steady base income, keeps each person's deposits within the DICGC limit at each bank for the FD portion, and avoids locking the entire sum into one product.

Nominees and joint holders

Always add a nominee when you open SCSS. On the death of a sole holder, the nominee or legal heir can claim the money. In a joint account with a spouse, the surviving spouse can continue the account if they are themselves eligible, or close it. Keeping nomination up to date saves the family a long paperwork process at a difficult time.

Quick answers

Can I open SCSS at 58? Only if you have retired and open the account within the allowed time after receiving retirement benefits; otherwise you have to wait until 60.

Is the interest rate fixed? Yes, for the account's five-year term at the rate on the opening date, even if later quarters change.

Can I take a loan against SCSS? Unlike some other schemes, SCSS does not offer a loan facility.

What happens on maturity if I do nothing? Check the current rules with your bank or post office, and decide on extension or closure before the date.

The bottom line

SCSS is a simple, government-backed way to turn a retirement lump sum into a steady quarterly income, with a five-year commitment and a cost for leaving early. Rates and limits change, so confirm the current figures in the official notification before investing. This guide is general information, not personal financial advice.