Guide
Senior Citizens Savings Scheme: quarterly income from a government deposit
For retired people who want a steady income without market risk, the Senior Citizens Savings Scheme is one of the best-known choices in India. You make a single deposit, you receive interest every quarter, and at the end of the term the whole deposit is returned. The government sets the rate, reviewing it every quarter, and the rate that applies on the day you deposit stays for the life of the account. This page turns the numbers into income you can plan around.
How the interest is calculated
Interest is simple, not compounded: each quarter you receive the deposit × the yearly rate ÷ 4. For the maximum deposit of 30,00,000 at 8.2% that is 61,500 a quarter, 2,46,000 a year and an average of 20,500 a month. Payments are made on 31 March, 30 June, 30 September and 31 December. The first payment can cover a shorter period if the deposit falls part-way through a quarter, a detail the page leaves out by assuming whole quarters.
A worked example
The default is a deposit of 30,00,000 at 8.2% for 5 years. The total interest over the term is 12,30,000, the principal of 30,00,000 comes back at the end, and the total received is 42,30,000. The table lists each year’s interest, 2,46,000, and the running total. In the second example, 10,00,000 for a person in the 30% tax slab pays 20,500 a quarter, 82,000 a year and 6,833 a month on average, with 4,10,000 of interest over five years, of which 2,87,000 remains after tax.
Tax on the income
The interest from SCSS is taxable as income at your slab rate, so the real income is lower than the figure for a taxpayer in a higher slab. Banks and post offices may deduct tax at source when the yearly interest exceeds a threshold, and a senior citizen with a low income can submit a form to avoid it. The tax field applies one rate to the whole interest, which is a fair estimate for a stable income. Deposits qualify for a deduction under section 80C in the old regime.
Comparing with a fixed deposit
A bank fixed deposit that pays interest every quarter and one that compounds look similar, but the SCSS pays out its interest rather than adding it to the balance, so the comparison is with a deposit that pays interest out. If you reinvest the quarterly payments, you can approximate compounding. The FD calculator shows the compounding case, and the SCSS usually pays a higher rate than ordinary bank deposits, though it is open only to eligible people.
Edge cases
The deposit must be positive and at most 30,00,000, and in the scheme it must be in multiples of 1,000. The page does not enforce multiples. The term is a whole number of years up to 8. A rate of zero pays nothing. Early closure has penalties in the first years that the page does not model.
Limits
The rate is constant over the term in the page, as it is in the scheme once you have deposited. Eligibility rules, the number of accounts a person can hold and limits across accounts are not checked. The page is an estimator, not an application.
Related tools
- POMIS Calculator covers a similar post office scheme that pays monthly.
- FD Calculator shows what a compounding bank deposit would pay for comparison.
- NSC and KVP Calculator values certificates that pay everything at the end.
- Retirement and FIRE Calculator shows how fixed income fits into a long retirement.
Checked against the current version of the SCSS Calculator on .