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Post Office Senior Citizen Savings Scheme (SCSS) remains one of the safest and high interest paying options for senior citizens looking for regular monthly or quarterly income after retirement. This small savings scheme backed by the Government of India is currently offering an annual interest rate of 8.2%, with the interest income transferred directly to the investor’s bank or post office savings account every quarter. If a retired person invests a lump sum of maximum limit of ₹30 lakh set by the government, he gets a guaranteed income of ₹61,500 every quarter without any risk.
Under the Senior Citizen Savings Scheme, interest is paid not on monthly basis but every three months i.e. in quarterly cycle (April, July, October and 1st of January). The exact calculation of returns in the scheme is as follows:
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Lump sum investment amount: ₹30,00,000 (maximum limit)
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Current Annual Interest Rate: 8.2% per annum
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Annual total interest income: 8.2% of ₹30,00,000 = ₹2,46,000 per year
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Quarterly Interest (every 3 months): ₹2,46,000 / 4 = ₹61,500
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Monthly average income: ₹61,500 / 3 = ₹20,500 per month
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Total interest income in 5 years: ₹2,46,000 × 5 = ₹12,30,000
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Total amount on maturity after 5 years: Principal (₹30 Lakh) + Total Interest (₹12.30 Lakh) = ₹42,30,000
The Central Government has set clear eligibility conditions for opening an account under this scheme:
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General Senior Citizen: The age of the investor should be 60 years or more.
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Employees taking VRS or superannuation: Civil servants taking voluntary retirement between 55 years to 60 years can invest within 1 month of receiving the retirement benefits.
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Former employees of defense services: Retired Army or Armed Forces personnel are eligible for this scheme on completion of 50 years of age under certain conditions.
Under the scheme, investment can be made for a minimum of ₹1,000 and a maximum of ₹30,00,000 in multiples of ₹1,000. Both husband and wife can open separate or joint accounts and invest up to a maximum of ₹ 60 lakh as per their eligibility, taking the total quarterly income of the family to ₹ 1,23,000. The primary maturity period of this account is 5 years. After completion of 5 years, if the account holder wishes, he can extend it in a block of 3 years.
| investment amount | Annual Interest (8.2%) | quarterly income | Total interest in 5 years |
| ₹5,00,000 | ₹41,000 | ₹10,250 | ₹2,05,000 |
| ₹10,00,000 | ₹82,000 | ₹20,500 | ₹4,10,000 |
| ₹15,00,000 | ₹1,23,000 | ₹30,750 | ₹6,15,000 |
| ₹20,00,000 | ₹1,64,000 | ₹41,000 | ₹8,20,000 |
| ₹30,00,000 | ₹2,46,000 | ₹61,500 | ₹12,30,000 |
Under Section 80C of the Income Tax Act, the amount deposited in SCSS gets the benefit of tax deduction up to ₹ 1.5 lakh. However, the interest received is fully taxable and is calculated as per the respective income tax slab of the investor. If the total interest received from SCSS in a financial year exceeds ₹50,000 for senior citizens, TDS is deducted by the post office. If the total annual income is less than the taxable limit, Form 15H can be submitted to avoid TDS.
SCSS account can be easily opened by visiting any CBS (Core Banking Solution) enabled branch of the post office or authorized commercial banks. This requires the applicant’s Aadhar card, PAN card, two passport size photographs, age certificate and Pension Payment Order (PPO) or Retirement Disbursement Certificate for retired employees.