SCSS Interest Rate, Eligibility, And Benefits: What Retirees Need To Know

The government has kept the deposit rate on Senior Citizens Savings Scheme (SCSS) unchanged at 8.20 per cent for the July-September 2025 quarter. It is one of the top-grossing small savings schemes currently with stability and quarterly return for senior citizens.

What is SCSS

SCSS is a popular investment facility among senior citizens looking for fixed returns with a government guarantee. The scheme is operated through post offices as well as authorised banks. With its relatively higher rate of interest and tax relief under Section 80C of the Income-tax Act, 1961 (under the old tax regime), SCSS continues to be a major draw for senior citizens eager to safekeep their retirement corpus by way of guaranteed returns.

Who Can Invest in SCSS

To make investments in SCSS, one should be 60 years or more. Retirees between the ages of 55 and 60 years who have taken voluntary retirement (VRS) or superannuation, as well retired defence personnel aged 50 years and above are also eligible to invest, subject to making the investment within a month of getting the retirement benefits. Evidence of retirement and benefit payment should be furnished by applicants below 60 years of age.

Non-Resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not permitted to invest in SCSS. 

Benefits Of SCSS

One of the most important advantages of SCSS is the quarterly payment of interest. It gives a fixed and regular flow of income. Interest is deposited in the subscriber’s account every quarter. 

The highest investment possible under this scheme is Rs 30 lakh for an individual. The maturity duration of the scheme is five years, extendable once for an additional duration of three years. The investment is completely safe since it is guaranteed by the Government of India.

SCSS investments are also deductible under Section 80C of the Income-tax Act, 1961 (under the old tax regime) for a maximum of Rs 1.5 lakh in a financial year. The new Finance Bill, 2025 states that senior citizens with total income, including those from SCSS, below Rs 12 lakh will not be required to pay any taxes. Interest received on such investment is, however, taxable, and Tax Deducted at Source (TDS) is required if the interest for the financial year exceeds Rs 50,000. Senior citizens can submit Form 15H to claim exemption from TDS if their total income for all sources falls below the taxable limit.

A Preferred Option Under Rate Volatility

With interest rates on various savings and fixed deposit schemes being volatile, the option of keeping SCSS rates fixed provides a degree of stability for senior citizens. For senior citizens seeking a combination of security, decent returns, and regular income, SCSS is one of the most sought-after small savings schemes.