The Senior Citizens Savings Scheme (SCSS) is specifically designed for Indians aged 60 and above, and offers the highest guaranteed, government-backed interest rate currently available — 8.2% per annum for Q1 FY 2026–27. Interest is paid quarterly directly into your bank account, making it an excellent source of regular retirement income.
Defence personnel who have retired can open SCSS at age 50. Individuals who have taken voluntary retirement can open SCSS at age 55. The maximum investment limit was raised to ₹30 lakh per person in Budget 2023 (from the earlier ₹15 lakh). Couples can each hold ₹30 lakh, effectively allowing ₹60 lakh per household.
- Closure before 1 year: entire interest amount is recovered
- Closure between 1–2 years: 1.5% penalty on deposited amount
- Closure between 2–5 years: 1% penalty on deposited amount
- After 5 years, extend for another 3 years at the rate prevailing at the time of extension
- Nomination can be registered and updated at any point during the account's life
Investment in SCSS qualifies for Section 80C deduction up to ₹1.5 lakh per year under the old tax regime. However, the quarterly interest income is fully taxable as per your income tax slab. If the annual interest exceeds ₹50,000, TDS (Tax Deducted at Source) is applicable. You can submit Form 15H if your total income is below the taxable limit to avoid TDS.