Personal Finance News
3 min read | Updated on April 02, 2025, 03:49 IST
SUMMARY
While the Senior Citizens Savings Scheme (SCSS) is seen as a safe investment option for seniors, the interest payment schedule is often confusing.
Under SCSS, payments are always made after the completion of each quarter. | Representational image: Shutterstock
The SCSS interest rate is higher than most of the 5-year FDs offered by banks and the post office.
While the scheme is seen as a safe investment option for senior citizens, there is often confusion around the interest payment schedule. Recently, a senior citizen sent us an interesting query as follows:
Although the factual details shared by the senior citizen align with the official SCSS interest payment rule, we assume from the above query that more depositors like him might be confused about the SCSS payment schedule. Therefore, we have explained it with an example as follows:
First, let's look at the official rule about the SCSS payment schedule
"Interest shall be payable from the date of deposit to 31st March/30th June/30th September/31st December on first working day of April/July/October/January, as the case may be, in the first instance and thereafter interest shall be payable on first working day of April/July/October/January as the case may be."
Let's understand with an example:
Suppose the SCSS account is opened on March 1, 2025.
As per the above rule, the first interest payment for March 1 to March 31, 2025 will be credited on the first working day of April 2025.
Under SCSS, payments are always made after the completion of each quarter. Therefore, subsequent interest payments will be credited on the first working day of July, October, January, April, and so on.
On January 1, 2030, interest for the three months between October and December 2029 will be credited.
This account will complete five years on March 1, 2030. And its last quarter will fall under Q4 FY 2029-30 (January to March 2030). Therefore, as per the rule mentioned above, the interest will be credited on the first working day of April 2030.
However, in the last quarter, interest will not be paid for three months, but only for two months as the account will complete five years 30 days before the end of Q4 FY 2029-30.
Please note that the SCSS interest is paid for five years at the rate applicable at the time of account opening, following the schedule set by the Government. The account can also be extended for another three years at the rate applicable at the time of extension.
However, senior citizens should verify whether they have received full interest. If there are discrepancies, they should consider raising a complaint.
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