📖 Understanding Senior Citizen Savings Scheme (SCSS)

Senior Citizen Savings Scheme (SCSS) is a government-backed savings scheme designed specifically for senior citizens aged 60 and above. It offers one of the highest interest rates among small savings schemes with regular quarterly interest payouts.

Key features: Current interest rate is 8.2% per annum (revised quarterly), maximum investment ₹30 lakh, tenure of 5 years (extendable by 3 years), interest paid quarterly directly to bank account, premature withdrawal allowed with penalty (0-1.5%), and tax deduction under Section 80C up to ₹1.5 lakh.

The quarterly interest payout makes SCSS ideal for retirees who need regular income. For example, a ₹30 lakh deposit at 8.2% pays ₹61,500 every quarter (₹20,500 per month). This regular income supplements pension and helps manage monthly expenses.

SCSS interest is fully taxable as per your income tax slab. However, the initial investment qualifies for Section 80C deduction. For retirees in the 0-5% tax bracket, post-tax returns remain attractive. Compare with POMIS, bank FDs, and SWP from mutual funds.