SCSS 2026: Lock In 8.2% for 5 Years — How Senior Citizens Can Earn ₹2,46,000 Annually

The Senior Citizens' Savings Scheme (SCSS) pays 8.2% a year for deposits made from 1 October to 31 December 2026. You can invest up to ₹30 lakh per person, and ₹30 lakh earns ₹61,500 every quarter. The rate on your deposit stays fixed for the five-year term, and the principal is government-backed.

Rate, limit and who can open an account

The Finance Ministry's Office Memorandum of 30 September 2026 kept all small-savings rates for October–December 2026 unchanged from July–September, as circulated by the Department of Posts in SB Order No. 12/2026. India Post's savings page (updated 19 October 2026) lists SCSS at 8.2% a year. The memorandum itself does not print a scheme-wise table, so the 8.2% figure comes from India Post's page.

• Age 60 or more on the day you open the account.
• Age 55 to under 60, if you retired on superannuation or voluntarily. You must open the account within three months of receiving your retirement benefits, and the deposit cannot exceed those benefits or ₹30 lakh, whichever is lower.
• Defence services retirees (not civilian defence employees) can open from age 50 on the same conditions.
• Joint account with a spouse is allowed. The first holder's age decides eligibility, and the whole deposit counts towards the first holder's ₹30 lakh limit. So a couple reaches ₹60 lakh only if each spouse deposits in an account where they are the first holder. Details are in our joint account guide.

The minimum deposit is ₹1,000, in multiples of ₹1,000. Each account takes only one deposit, so a later top-up means opening another account. India Post's scheme booklet (October 2024 edition) says cash is accepted up to ₹1 lakh, larger amounts need a cheque or transfer, and deposits above ₹10 lakh need proof of the source of funds. NRIs are not eligible.

What you earn at 8.2%

Interest is paid on the first working day of April, July, October and January. The first payout covers the days from your deposit date to the quarter-end. Interest you do not claim earns no extra interest, and interest is not reinvested inside the scheme, so these totals are simple interest. A couple with ₹30 lakh each earns ₹4,92,000 a year before tax.

Tax: old and new section numbers

The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. The default tax regime now allows almost none of the Chapter VIII deductions (section 202 of the 2025 Act), so the deductions below help only if you choose the old regime.

• Deposit deduction: Section 80C of the 1961 Act is now Section 123, capped at ₹1,50,000. Deposits under the Senior Citizen Savings Scheme Rules, 2004 are listed in clause 1(u) of Schedule XV.
• Interest is taxable at your slab rate. There is no senior-citizen concession on SCSS interest itself.
• Interest deduction: Section 80TTB is now Section 153(2)(b). A senior citizen can deduct up to ₹50,000 of interest on deposits with a bank, co-operative bank or post office, again only in the old regime. The text refers to deposits generally, so confirm in your ITR utility that SCSS interest is accepted.
• TDS: Section 194A is now covered by Section 393(1), table serial 5(ii). For a post office deposit under a notified scheme, the threshold is ₹1,00,000 for a senior citizen (₹50,000 for others). Budget 2025 raised it from ₹50,000. India Post's booklet says the test applies to total interest across all your SCSS accounts.

At 8.2%, interest crosses ₹1 lakh a year once your total SCSS deposits go above about ₹12.19 lakh (₹1,00,000 ÷ 0.082). TDS is deducted at the prescribed rate, which is shown as "rates in force" in the Act. If your total tax for the year will be nil, submit the Form 15H declaration (the form's number may differ under the 2025 Act rules; ask the post office for the current one).

SCSS compared with a bank FD, after tax

SBI's published senior-citizen rate for 5 to 10 years is 7.05% a year, which includes a 0.50% extra for seniors, effective 15 December 2025 as shown on its site when checked. Bank rates change often, so treat this as a reference point. The table uses simple annual interest on ₹10 lakh and the tax rate you pay on your last rupee of income, before cess.

Beyond rate, three differences matter. SCSS fixes your rate for five years, while a bank can change rates on new deposits at any time. Bank deposits are insured only up to ₹5 lakh per depositor per bank, principal and interest together. A bank FD can pay more if a bank offers a higher senior rate, or can pay out monthly, so compare the actual offer. If your corpus is bigger than the ₹30 lakh cap, fill SCSS first, keep no more than ₹5 lakh with any one bank so every rupee stays insured, and hold three to six months of expenses in a savings account or liquid fund. For the FD part, see see FD laddering and the monthly-income comparison.

Maturity, extension and early closure

The account matures after five years. You can extend it in blocks of three years, with no stated limit on the number of blocks, by applying in Form-4 within one year of maturity or of the end of each block. The extension counts from the maturity date even if you apply later, and the rate is the one in force on the maturity or extended-maturity date. Our extension guide covers the process. If you neither extend nor close, the deposit earns only the post office savings rate.

On the holder's death the account closes and the nominee is paid, with the savings-account rate applying from the date of death. If the account is joint or the spouse is the sole nominee, the spouse can continue it if they are eligible on that date.

Mistakes to avoid

• Assuming the retirement window is one month. The rule has allowed three months since November 2023.
• Planning a second deposit into the same account. Open a new one instead.
• Counting on the Section 123 deduction while filing under the new regime.
• Forgetting TDS applies to combined SCSS interest, not each account separately.
• Putting money you may need within a year into SCSS, where early exit returns the interest paid.

This is general information from official rules as of October 2026; confirm your own tax position before you file.