Senior Citizen Savings Scheme (SCSS) – Interest Rate, Advantages & Eligibility Criteria for SCSS

Senior Citizen Savings Scheme is a plan to offer monetary security to the elderly people in India who are above the age of 60 years. This scheme is designed by the government of India to allow a steady income coming for the senior Indian citizens after they are retired. The scheme comes with many benefits such as regular money flow, investment options and tax benefits among others.  The duration of the SCSS is 5 years. However, it can further be extended for another 3 years. The scheme is currently available at a current rate of interest of 8%.

Interest Rate of Senior Citizen Savings Scheme 2025

The current rate of interest under SCSS is 8% per annum as of the initial quarter of 2025. The SCSS rate of interest is generally regulated by Ministry of Finance, Government of India and is changed on a periodic basis. The interest rate under SCSS is computed and credited on a quarterly basis.

Below is the applicable rate of interest on SCSS schem

Time Period	Interest Rate (% Annually)
October to December (Q3 FY 2024-25)	8.2
July to September (Q2 FY 2024-25)	8.2
April to June (Q1 FY 2024-25)	8.2
January to March (Q4 FY 2024-25)	8.2
October to December (Q3 FY 2023-24)	8.2
July to September (Q2 FY 2023-24)	8.2
April to June (Q1 FY 2023-24)	8.2
January to March (Q4 FY 2023-24)	8.0

 

Senior Citizen Savings Scheme ROI Calculation 

The SCSS interest rate can be calculated easily. All you need is to compute the compound interest on the amount invested taking into account the SCSS interest rate as applicable in that quarter. By making the calculations, the policy seeker can come to know about the interest earned on the investment. The payment or the maturity amount is paid to the savings bank account of the policyholder each year.

7 Advantages of Senior Citizen Saving Scheme

The fact that SCSS is a savings cum investment plan, it serves best for the elderly citizens. In fact, SCSS is one of the ideal policies offering high interest rates. Further, the fact that it is a government backed plan makes it all the more popular and effective. The SCSS is a scheme that is formulated to fulfil the insurance requirement of senior citizens who are investment oriented.

Here are some advantages of this plan:

1. Easily available – The SCSS is an easily available scheme that can be availed with ease. You can simply visit your bank nearby or post office and fill out an SCSS application form to get the process done.
2. Reliability – SCSS is a government supported investment instrument provided by the Indian Government and is loaded with the assurance of financial security.
3. Multiple Accounts – The best part about an SCSS account is that an individual can have multiple accounts in the form of individual or joint accounts. However, in case of a joint account, the other investor must be the spouse of the key investor.
4. Good Returns – The Senior Citizen saving scheme interest rate is 8.7 % per year at present, which makes it a plan with good return.
5. Flexible Duration – The SCSS scheme is available with a five years’ time period, which can be extended for 3 more years. Hence, the SCSS can be used as a mid- and long-term investment plan as well.
6. Tax Saving Scheme – The SCSS scheme can be used for saving TDS and income tax under Section 80C of Income Tax Act, 1961.
7. Premature Policy Termination – In the event of financial crisis, the SCSS scheme can be closed prematurely to access your money saved under the scheme. However, for this the SCSS account should be active for at least a year. The bank, however, will levy a 1.5 % penalty for premature closure of the scheme. In case your SCSS account is 2-year-old, you are levied with 1% penalty for terminating the policy before maturity.

5 Disadvantages of Senior Citizen Savings Scheme (SCSS)

1. Limited investment amount: The SCSS allows for a maximum investment of Rs. 15 lakhs. This may not be the best alternative for people looking to invest a larger sum.
2. Taxation: The interest earned on the SCSS is taxable according to the investor’s tax bracket, which reduces overall returns.
3. Inflation risk: The interest rate on the SCSS may be insufficient to keep up with inflation, eroding the real value of the investment over time.
4. Fixed interest rate: Because the interest rate on the SCSS is fixed, investors will not be able to benefit from any increase in interest rates over the scheme’s tenure.
5. No joint account: Because the SCSS account can only be formed in the name of a single person, those who want to open a joint account with a spouse or family member may be disappointed.

Senior Citizens Saving Schemes Eligibility Criteria  

Below are the criteria of eligibility for SCSS:

• An SCSS account can be opened by an Indian citizen who is 60 years and above
• The deposit limit under SCSS scheme is INR 1.5 lakh. So, an individual can deposit up to a maximum amount of INR 1.5 lakh
• The tenure of the SCSS scheme is 5 years, after which the amount matures. However, the investor can extend the duration to another 3 years under the scheme

How to Calculate the SCSS Maturity Amount?

The SCSS investments are compounded annually and are automatically credited to the savings account of the account holder. At present the SCSS interest rate is 8.7%.

So, for instance, if you deposit INR 15 lakh under the scheme for a period of 5 years, the maturity amount of the deposit is calculated as (15,00,000*1.086)^5 = Rs 22.65 lakh). One can use a SCSS online calculator to compute the maturity amount online within seconds. The investor can submit details like tenure of policy, the invested amount, and the interest rate.

Senior Citizen Saving Scheme Application Form

Application form of SCSS account can be availed either online or offline at any of the post offices across India and with most of the public and private sector banks in their official websites.

However, the SCSS account can’t be opened online. The applicant is likely to download the application form and get a print out of the form and fill in the required details. This form has to be submitted at the bank or post office together with the KYC papers.

Here are the documents needed to be submitted at the time of SCSS account opening:

• Applicant’s name
• PAN number
• Family member details
• For joint account, you need to mention details like name, age and address of the other account holder
• Cheque/demand draft of the deposited amount
• Nominee name (if any)

Is Premature Withdrawal of SCSS Deposit Possible?

Premature withdrawal of the SCSS account is possible before the policy ends. However, it is possible only after the account completes one year of the scheme. There is a penalty of 1.5% levied on the premature withdrawal of the account after the completion of one year of the scheme. Similarly, in case the account completes 2 to 5 years of time, the penalty levied is 1% on premature withdrawal of the scheme.