For senior citizens looking for a steady income after retirement, government-backed savings schemes can offer a relatively secure investment option. The Senior Citizens' Savings Scheme (SCSS) is one such option, paying interest every quarter to help retirees manage regular expenses.
Investors can deposit up to Rs 30 lakh in the scheme, which has an initial tenure of five years. The interest rate is reviewed periodically by the government and may change for new deposits.
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The scheme can help retirees build a regular income stream to meet expenses such as medical bills, household costs and assisted living, without having to depend entirely on their retirement savings.
Interest On Rs 30 Lakh Deposit
Suppose a person wants to invest Rs 30 lakh into the Senior Citizens' Savings Scheme. The interest they get would be as follows:
Initial Deposit: Rs 30 lakh
Interest Rate: 8.2% (as of March 2026)
Time: 5 Years
Quarterly Interest: Rs 61,500
Annual Interest: Rs 2.46 lakh
Total Interest After 5 Years: Rs 12.30 lakh
Note: The principal amount of Rs 30 lakh is payable separately upon maturity.
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Features Of Senior Citizens' Savings Scheme
Senior citizens aged 60 years and above and individuals of 55 years or above but less than 60 years who have retired under superannuation, Voluntary Retirement Scheme (VRS), or special VRS can invest in the scheme.
The minimum investment is Rs 1,000. Once the five-year period has passed, the account can be extended for another three years. Interest is paid quarterly from the date of deposit.
Interest is credited to the holder's bank account on the first working day of April, July, October, and January.
Premature closure of the SCSS account is allowed, subject to payment of penalties. If the account is closed less than one year from the date of opening, the interest paid on the deposit shall be deducted from the funds, and the balance will be given to the account holder.
The principal amount invested in the scheme qualifies for a tax deduction of up to Rs 1.5 lakh per year under Section 80C of the Income Tax Act, 1961. It can only be availed under the old tax regime.
The interest earned on the SCSS account is taxable according to the individual's income tax slab. If the interest earned in a financial year is over Rs 50,000, Tax Deducted at Source (TDS) applies.
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