SCSS: the highest-rate guaranteed income for retirees
The Senior Citizen Savings Scheme is specifically designed for retirees — it combines the highest guaranteed interest rate among small savings schemes (8.2%) with quarterly payouts, making it ideal for regular income post-retirement.
SCSS vs. bank FD for senior citizens (2025)
| Feature | SCSS | Bank Senior FD |
|---|---|---|
| Rate | 8.2% p.a. | 7.25–8.0% p.a. |
| Interest payout | Quarterly (Apr/Jul/Oct/Jan) | Monthly/quarterly/at maturity |
| Maximum deposit | ₹30 lakh | No limit (DICGC covers ₹5L) |
| Government guarantee | Yes | No (bank guarantee, DICGC up to ₹5L) |
| 80C deduction | Yes | Yes (5-yr FD) |
| Premature closure | After 1 year (with penalty) | Usually allowed |
| Tenure | 5 years (extendable by 3 years) | 7 days to 10 years |
For guaranteed income above ₹5 lakh, SCSS is safer than bank FDs (which are only guaranteed by DICGC up to ₹5 lakh per bank).
Quarterly payout vs. maturity: what to expect
SCSS pays interest quarterly. If you deposit ₹20 lakh at 8.2%, you receive:
- Quarterly interest: ₹20,00,000 × 8.2% ÷ 4 = ₹41,000 every 3 months
- Annual interest: ₹1,64,000
- At the end of 5 years, you get the ₹20 lakh principal back
The calculator above shows total interest on a compound basis — but SCSS pays out interest quarterly (not compounding it). Use it to estimate total returns over the tenure.
Extension: 3 more years after 5 years
After the 5-year maturity, SCSS can be extended for 3 more years — one time. The extension must be applied within 1 year of maturity. The rate applicable is the rate at the time of extension, not the original rate.