How to Calculate Interest Income for the Senior Citizen Savings Scheme?

The Finance Minister, during the Union Budget 2023, increased the maximum deposit limit for the Senior Citizen Savings Scheme (SCSS) from  . This has made the SCSS a more attractive investment option for senior citizens in India.

Are you wondering how much interest you can earn on your investment in the SCSS scheme and how it compares to an FD? Read on to know more about the Senior Citizen Savings Scheme and how you can calculate your earnings.

What is the SCSS?

The SCSS is a retirement benefits program that is backed by the government. This allows senior citizens to invest a lump-sum amount and get a regular income post-retirement.

Senior citizens can open an SCSS account, individually or jointly, from any post office branch or an authorised bank. You can open this account by depositing a minimum of ₹1,000 or a maximum of ₹30 Lakhs. Moreover, you earn interest on your SCSS deposited amount, which is paid once every quarter.

Features and Benefits of the SCSS Scheme

The following are some of the  of availing the SCSS scheme.

  • Security: The investment that you make towards SCSS comes with a sovereign guarantee, which means that it is backed by the government.
  • Interest Earnings: The amount that you deposit in SCSS earns your interest at the rate fixed by the government. The interest payments are made to your account every quarter.
  • Flexible Maturity Period: The maturity period of SCSS is 5 years which can be extended by 3 years. To get an extension, you need to submit an application in the fourth year of making the investment.
  • Flexible Deposit Amount: The minimum amount that you can deposit towards your SCSS account is ₹1,000. On the other hand, the maximum amount that you can deposit to your SCSS account in a single instalment is ₹30 Lakhs.
  • Payment Mode: If you wish to deposit less than ₹1 Lakh into your SCSS account, you can do so with cash. However, you will have to deposit using a cheque if the amount exceeds ₹1 Lakh.
  • Number of Accounts: You can open more than one SCSS account. The scheme allows you to open a second account individually or jointly with your spouse.
  • Account Transfer: The SCSS scheme also lets you transfer your account seamlessly. You can shift it from Bank to Post Office or vice versa.


Senior Citizen Savings Scheme Interest Rate

Note that the government revises the savings scheme interest rate every quarter. The interest rate on SCSS deposits notified by the government  .

However, remember that once you invest in the SCSS scheme, the interest rate remains the same for the entire tenor. For instance, for the investment made in this quarter, the interest rate for the entire tenor of your investment will remain at 8.2% p.a.


Comparison of SCSS Interest Rate with FD Interest Rates from Top Issuers

The following   presents a comparison between SCSS and FD interest rates. This will help you decide which investment option is better for you.

Investment Instrument Interest Rates
Senior Citizens Savings Scheme 8.20% p.a.
Unity Small Finance Bank FD Up to 9.50% p.a.
Utkarsh Small Finance Bank FD Up to 9.00% p.a.
Fincare Small Finance Bank FD Up to 9.01% p.a.
Axis Bank FD Up to 7.95% p.a.
State Bank of India (SBI) FD Up to 7.60% p.a.

Disclaimer: The interest rate provided in the table above may change subject to policy changes by the banks/NBFCs.

How to Calculate Interest Income on SCSS Scheme?

The maximum amount that you can deposit is ₹30 Lakhs. Considering that you deposit the same amount, here is how much interest you will be able to earn.

Principal Amount ₹30 Lakhs
Tenor 5 years
Interest rate 8.20% p.a.
Quarterly Interest Received ₹61,500
Total Interest in 5 Years ₹12,30,000
Total Amount at Maturity ₹42,30,000


The interest on the SCSS is paid every quarter. If the amount that you deposit is ₹30 Lakhs, you can get the quarterly interest of 8.2/400 X ₹30,00,000= ₹61,500. So, the interest accrued by the end of the year would be ₹61,500 X 4= ₹2,46,000.

Moreover, the amount that you will receive at the time of maturity would be ₹2,46,000 X 5 = ₹12,30,000. So, the total amount that you will receive at the time of your SCSS account maturity would be ₹42,30,000.

In conclusion, if you wish to avail yourself of post-retirement benefits, Senior Citizen Savings Scheme is one of the best investment avenues for you. The SCSS currently offers an interest rate of 8.2% p.a.

If you wish to calculate interest payment on your SCSS deposit, you can do so manually by using the formula mentioned above. However, these calculations can be complex and are prone to errors.

To get accurate results about the interest you can earn on your SCSS deposit, you can use an SCSS interest calculator. This calculator will provide accurate numbers relating to the quarterly and annual interest payments along with the total amount receivable at maturity.