Senior Citizen Saving Scheme: The Ministry of Finance is reviewing the interest rates of small savings schemes for the January-March quarter of the financial year 2025-26 today. The Senior Citizen Savings Scheme (SCSS) is also included in this list. Therefore, senior citizens are eagerly awaiting the announcement of the SCSS interest rate today, December 31st. In the previous quarter (October-December), the SCSS interest rate remained at 8.2%.
The SCSS is a government retirement benefit scheme designed to provide financial security and meet the future needs of senior citizens. The government may announce the new SCSS interest rate today.
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Who can invest?
Individuals aged 60 years or older can invest in this scheme. It is a source of stable income after retirement. Currently, the scheme offers an 8.2% interest rate, which is higher than most bank fixed deposit rates.
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SCSS Investment and Tenure
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Since April 1, 2023, there has been no change in the interest rate of this scheme. Investments can be made from ₹1,000 to ₹30 lakh. The investment amount is locked in for 5 years, which can be extended later. Investments are eligible for tax exemption up to ₹1.5 lakh under Section 80C. The interest is taxable, but the principal amount is completely tax-free on maturity.
Interest Payment Process
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Interest in SCSS is paid every three months. The first interest payment is made from the deposit date until the end of March, June, September, or December. After that, interest is paid on April 1st, July 1st, October 1st, and January 1st every year. This makes it a good source of regular income for retired individuals.
For example, if someone invests ₹30 lakh in SCSS and the interest rate is 8.2%, they will receive ₹61,500 in interest every quarter. The total interest earned over 5 years will be ₹12,30,000, and the total amount at maturity will be ₹42,30,000.
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How is the interest rate for SCSS determined?
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The government does not directly set the interest rates for small savings schemes. The recommendations of the Shyamala Gopinath Committee, formed in 2010, are used as the basis for this. According to these recommendations, the SCSS rate is linked to the yield of 5-year government bonds, with an additional 0.25% added. The final decision rests with the Ministry of Finance, and it may sometimes differ from the recommendations.