Work out the quarterly interest on a Senior Citizen Savings Scheme deposit, the total over five years, and what the ₹30 lakh cap gets you.
Who can open an SCSS account?
Anyone aged 60 or above. Someone who took voluntary retirement can join at 55, and retired defence personnel at 50, in both cases within a month of receiving their retirement benefits. A spouse can hold a joint account whatever their own age.
How much can I put in?
Up to ₹30,00,000 across all your SCSS accounts, in multiples of ₹1,000. The limit is per person, so a couple who both qualify can hold ₹60,00,000 between them in separate accounts.
When is the interest paid?
On the last working day of March, June, September, and December, credited to your savings account. It is not added to the deposit, so it never compounds. If you do not withdraw it, it simply sits in the savings account earning the much lower savings rate.
Is the interest taxable?
Yes, at your slab rate. The bank or post office deducts TDS once the interest crosses the yearly threshold for senior citizens. Submit Form 15H if your total income is below the taxable limit and you want to stop the deduction.
Why is the credit in my passbook smaller than this page says?
Usually because TDS was taken off before the interest reached your savings account. On the narrow reading this page checks, one quarter credit either still looks like no TDS at all, or like the ordinary 10% section 194A rate on the quarter payout. If it matches neither, the next things to check are Form 15H, a lower-deduction certificate, another post-office deposit under the same PAN, or the quarter in which the deduction actually began.
Can I close the account early?
Yes, with a penalty. Closing before one year forfeits the interest already paid. Between one and two years costs 1.5% of the deposit, and after two years 1%. Plan the five years properly rather than counting on an early exit.
What happens after five years?
You can extend once for three more years by applying within a year of maturity. The extended account earns the rate in force on the maturity date, and you can close it any time after extending without a penalty.
SCSS or an FD?
SCSS usually pays more than a bank FD of the same term and is government backed, but it is capped at ₹30,00,000 and needs you to qualify on age. Most retirees fill the SCSS limit first, then use FDs and the post office MIS for anything above it.