SCSS interest rate in 2025: What does the Senior Citizen Savings Scheme offer to retirees?

The interest rate for the Senior Citizen Savings Scheme (SCSS) for the last quarter of FY 2024-25 has been declared. The government has decided to continue with the current interest rate of 8.2% on SCSS deposits. This rate will be applicable from January 1, 2025, to March 31, 2025.

Why is SCSS important?

The Senior Citizen Savings Scheme (SCSS) is one of the most popular small savings schemes catering to retired individuals.

According to an SBI Research report, the amount invested by senior citizens in SCSS increased from ₹22,492 crore in FY 2013-14 to ₹1.62 lakh crore in the first half of FY2023-24, showing a jump of around 89%.

SCSS serves as one of the best schemes for senior citizens, ensuring two benefits that make their lives easy:

1. Regular cash flow: SCSS allows a retired person to invest a maximum of ₹30 lakh with quarterly returns deposited in a savings account. For example, if a senior citizen invests ₹30 lakh at 8.2% interest, he/she will receive ₹61,500 per quarter in their savings accounts linked to the SCSS account.

2. Guaranteed returns: Like all other small savings schemes, SCSS also enjoys the sovereign guarantee of the Government of India. Hence, the returns are always guaranteed.

Who can open an SCSS account?

Senior citizens aged above 60 years can open SCSS accounts. Retired civilian employees aged between 55-60 years and retired defence employees aged between 50-60 years are also allowed to open SCSS accounts provided they invest within the first month of receiving their retirement benefits.

Even though a person can have multiple SCSS accounts, their combined deposits should not exceed the maximum limit. The minimum limit for investing SCSS account is ₹1,000.

SCSS interest rate history

The SCSS interest rate was last revised in the first quarter of FY 2023-24 when the government increased it from 8% to 8.2%.

SCSS maturity

An SCSS account matures after five years. But it can be extended for another three years from the date of maturity.

Deposits up to ₹1.5 lakh per year in SCSS qualify for deduction under section 80C of the Income Tax Act, 1961. Further, the interest income from the scheme up to ₹50,000 in a financial year is tax-free.