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  1. Senior Citizen's query on SCSS: If I start investing on March 1, why is the last quarter payment on April 1?

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Senior Citizen's query on SCSS: If I start investing on March 1, why is the last quarter payment on April 1?

rajeev kumar

3 min read | Updated on April 02, 2025, 03:49 IST

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SUMMARY

While the Senior Citizens Savings Scheme (SCSS) is seen as a safe investment option for seniors, the interest payment schedule is often confusing.

SCSS payment rule

Under SCSS, payments are always made after the completion of each quarter. | Representational image: Shutterstock

The Senior Citizen Savings Scheme (SCSS) is popular for providing guaranteed quarterly returns at a higher interest rate than fixed deposits to seniors. Recently, the Government decided to keep the SCSS interest rate unchanged at 8.2% for the April-June quarter of FY 2025-26.

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:

Question: If I open a SCSS account on 1st March for five years, then the last quarter of the fifth year interest is paid not on 1st of January, but instead paid on 1st of April, thus delaying interest for three months, causing inconvenience to senior citizens. Is this justified?

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

The Senior Citizens’ Savings Scheme, 2019 notification says the following about interest payment:

"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.

Have a query related to SCSS? We will try to get them answered by experts. Write to rajeev.kumar@rksv.in
Upstox

About The Author

rajeev kumar
Rajeev Kumar is a Deputy Editor at Upstox, and covers personal finance stories. In over 11 years as a journalist, he has written over 2,000 articles on topics like income tax, mutual funds, credit cards, insurance, investing, savings, and pension. He has previously worked with organisations like 1% Club, The Financial Express, Zee Business and Hindustan Times.

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