How SCSS pays you, quarter by quarter
How Senior Citizens' Savings Scheme interest is worked out and paid, what ₹5 lakh to ₹30 lakh earns at 8.2%, when TDS applies, how the interest is taxed, and the rules for closing early.
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In short
- SCSS pays simple interest every quarter. Quarterly interest = deposit × rate ÷ 4, so ₹15 lakh at 8.2% pays ₹30,750 a quarter.
- The rate is fixed for the account's five years at the rate on the day it opens. It is 8.2% for accounts opened from October to December 2026.
- You can deposit ₹1,000 to ₹30 lakh per person. A couple can hold up to ₹60 lakh between them, in two accounts.
- Above ₹1,00,000 of interest a year from one bank or post office, 10% TDS is deducted unless you file Form 15H. At 8.2% that happens on deposits above about ₹12.2 lakh.
- The interest is taxable at your slab rate. Only the deposit, up to ₹1.5 lakh, can be claimed under Section 80C, and only in the old tax regime.
The Senior Citizens' Savings Scheme is the government's deposit for people aged 60 and above. It pays a higher rate than most bank fixed deposits, it pays that interest out every three months, and the money is backed by the Government of India. For many retired people it is the first place a part of the retirement money goes. The calculator above shows what a deposit pays each quarter, each year and over the whole term, and what is left after tax. This guide explains the arithmetic and the rules behind it.
How to use the calculator
- Set the amount you will deposit, from ₹1,000 to ₹30 lakh, in steps of ₹1,000.
- Check the rate. It starts at the current SCSS rate. If you opened your account earlier at a different rate, set that.
- Choose the period: five years, or eight or eleven if you extend.
- Pick your tax slab to see the tax on the interest.
The results show the interest paid every quarter, the interest a year, the total over the period, the monthly equivalent, the tax a year at your slab, and the deposit you get back at the end.
The formula
SCSS pays simple interest, paid out rather than added to the deposit:
Interest a year = deposit × rate ÷ 100
Interest a quarter = deposit × rate ÷ 400
Total interest = interest a year × years
For ₹15,00,000 at 8.2%:
- a year: 15,00,000 × 8.2 ÷ 100 = ₹1,23,000
- a quarter: ₹1,23,000 ÷ 4 = ₹30,750
- over five years: ₹1,23,000 × 5 = ₹6,15,000
At the end of five years the ₹15,00,000 comes back in full. Because the interest is paid out to your savings account every quarter instead of staying in the scheme, it does not compound inside SCSS. If you reinvest each payment yourself, in a recurring deposit or a sweep account, you earn interest on it there.
What different deposits pay at 8.2%
| Deposit | Every quarter | A year | Over 5 years | TDS (no Form 15H) |
|---|---|---|---|---|
| ₹1,00,000 | ₹2,050 | ₹8,200 | ₹41,000 | No |
| ₹5,00,000 | ₹10,250 | ₹41,000 | ₹2,05,000 | No |
| ₹10,00,000 | ₹20,500 | ₹82,000 | ₹4,10,000 | No |
| ₹12,00,000 | ₹24,600 | ₹98,400 | ₹4,92,000 | No |
| ₹15,00,000 | ₹30,750 | ₹1,23,000 | ₹6,15,000 | Yes |
| ₹20,00,000 | ₹41,000 | ₹1,64,000 | ₹8,20,000 | Yes |
| ₹30,00,000 | ₹61,500 | ₹2,46,000 | ₹12,30,000 | Yes |
The full ₹30 lakh pays ₹61,500 every quarter, which works out to ₹20,500 a month. For a retired couple each holding ₹30 lakh in their own names, that is ₹41,000 a month between them.
When the interest is paid
Interest is credited on the first working day of April, July, October and January. The first payment covers the days from the date you deposit to the end of that quarter, so it is smaller than the rest if you open the account partway through a quarter. The calculator shows the full quarterly amount that every later payment will be.
Interest that is not withdrawn from the savings account does not earn the SCSS rate. Most people link the account to a savings account, where the payments land automatically.
The interest rate is fixed when you open
The government sets small savings rates every quarter. SCSS is 8.2% for accounts opened between 1 October and 31 December 2026, unchanged from the previous quarters.
What matters is the rate on the day you open: that rate then applies for the full five years, whatever happens to rates later. If rates fall next year, your account keeps paying 8.2%; if they rise, it does not go up. When you extend the account at maturity, the extension is at the rate in force on the day it matures.
Who can open an account
- Anyone aged 60 or above.
- People aged 55 to 60 who retired on superannuation or by voluntary retirement, if they invest within one month of receiving their retirement benefits, and only up to the amount of those benefits.
- Retired defence personnel aged 50 or above, on the same condition.
You can hold more than one account, alone or jointly with your spouse, but the ₹30 lakh limit counts all your SCSS deposits together. In a joint account, the whole deposit counts towards the first holder's limit.
TDS and Form 15H
A bank or post office must deduct tax at source under Section 194A when the interest it pays you in a financial year goes above a limit. For senior citizens that limit is ₹1,00,000 a year, from the financial year 2025-26.
At 8.2%, ₹1,00,000 of interest comes from a deposit of about ₹12.2 lakh. Above that, 10% of the interest is deducted as TDS. It is not an extra tax: it counts towards your income tax for the year and appears in your Form 26AS, and if your actual tax is lower you get the difference back as a refund.
If your total income is low enough that you owe no tax at all, submit Form 15H to the bank or post office at the start of each financial year, and no TDS is deducted.
How SCSS interest is taxed
The interest is taxable at your slab rate, plus 4% health and education cess, like FD interest. The calculator's slab option shows the tax a year: on ₹1,23,000 of interest at a 30% slab, that is ₹1,23,000 × 30% × 1.04 = ₹38,376.
Two things soften this for senior citizens:
- Section 80C: the deposit, up to ₹1.5 lakh in a year, can be deducted from income, but only in the old tax regime.
- Section 80TTB: in the old regime, a senior citizen can deduct up to ₹50,000 a year of interest from deposits with banks and post offices, which covers SCSS interest.
In the new tax regime neither deduction is available, but its higher basic exemption and the rebate under Section 87A mean many retired people pay no tax on moderate interest anyway. The income tax calculator shows your actual tax both ways.
Extending the account
At the end of five years you can close the account and take the deposit back, or extend it for a further three years. Extensions can be repeated in blocks of three years. The calculator's 8- and 11-year options show one and two extensions at the same rate; in practice, each extension is at the rate in force when it starts.
An extended account can be closed after one year of the extension without any deduction.
Closing early
You can close an SCSS account before five years, but it costs you:
| Closed | What you lose |
|---|---|
| Within the first year | The interest |
| After one year, before two | 1.5% of the deposit |
| After two years, before five | 1% of the deposit |
On ₹15 lakh, closing after eighteen months costs ₹22,500, and after three years ₹15,000. If the account holder dies, the account is closed and paid to the nominee or legal heirs without these deductions.
SCSS against a bank FD
A senior citizen FD at a large bank pays somewhat less than SCSS at the moment, compounds if you choose cumulative interest, and has no ₹30 lakh limit. SCSS pays more, its rate is fixed by the government for five years, and its payout is predictable. Many retired people use both: SCSS up to the limit for regular income, and FDs for the rest. The FD calculator shows what a bank deposit would pay for comparison.
What this calculator assumes
- Interest is simple and paid every quarter: deposit × rate ÷ 400, worked in paise and shown to the rupee.
- The rate stays the same for the whole period chosen, including extensions.
- The first, part-quarter payment is not shown separately.
- Tax is your slab rate plus 4% cess on the full yearly interest, before any 80TTB deduction.
- TDS is flagged when the yearly interest from the deposit is above ₹1,00,000.