The Senior Citizens Savings Scheme (SCSS), a government-backed small savings scheme, is one of the most popular investment options among senior citizens looking for regular and predictable income after retirement. Interest under SCSS is paid quarterly.
SCSS is offering an interest rate of 8.2% per annum for the April-June 2026 quarter. SCSS has a maturity period of five years, making it an attractive choice for those seeking stable returns with low risk.
How much should you invest in SCSS to earn Rs 20,000 monthly income?
To generate a monthly income of Rs 20,000, a senior citizen would need a quarterly income of Rs 60,000.
At the current SCSS interest rate of 8.2% per annum, the required investment to get a quarterly income of Rs 60,000, equal to Rs 20,000 monthly, is approximately Rs 29.30 lakh. The maximum investment allowed in SCSS is Rs 30 lakh.
Desired monthly income: Rs 20,000
Annual income required: Rs 2,40,000
SCSS interest rate: 8.2% per annum
Required investment = Approximate investment required Rs 29.27 lakh
When is SCSS interest paid?
The SCSS interest is paid every quarter and is credited to the depositor's savings account on April 1, July 1, October 1, and January 1 each year. The interest is calculated up to March 31, June 30, September 30, and December 31, respectively, as per information on the India Post website.
SCSS tax benefit
Investments in SCSS qualifies for tax benefits under Section 80C of Income Tax Act, 1961. This tax benefit is available only in the old tax regime.
Tax Deducted at Source (TDS) is applicable if the total interest in all accounts including SCSS exceeds the prescribed limit in a financial year unless Form 15G/15H is submitted.
SCSS investment limit
The tenure of the deposit is five years and can be further extended by three years.
The maximum SCSS investment allowed is Rs 30 lakhs in all SCSS accounts opened by an individual. Both the spouses can open a single SCSS account and joint accounts with each other with the maximum deposit of up to Rs 30 lakh in each account provided both are individually eligible to open the account.
If an excess deposit is made in an SCSS account, the depositor will get a reimbursement, and the interest rate on the post office savings account will apply, and will be valid from the date of the excess deposit until the return date.
When can an SCSS account be closed?
The deposit made at the time of an SCSS account opening will be paid on or after five years from the date of opening the account, or after any three-year block period when the account was extended. Provided that, following the closure of an existing SCSS account, the depositor may open new accounts as needed, subject to the maximum deposit limit.
In case of the death of an account holder, from the next day of the date of their death, the SCSS account will earn interest at the rate of the post office savings account till the date of the final closure of the account.
