For the past few years, the situation for investors in bank fixed deposits (FDs) has not been the same. In 2025, the RBI cut the repo rate four times, making borrowing cheaper, but interest rates on fixed deposits have been steadily declining.

This has had the biggest impact on senior citizens, who find fixed deposits to be the most reliable option for safe investment. Although banks offer senior citizens up to 0.50% higher interest rates than general investors, the declining rates have had an impact on their income. In such a situation, the Senior Citizens Savings Scheme (SCSS) of the post office has emerged as a popular option.

What is the Senior Citizens Savings Scheme (SCSS)?

SCSS is a government savings scheme run by post offices and select banks. It has been designed with senior citizens in mind. The scheme currently offers an interest rate of 8.2% per annum, which is much higher than the current FD rates. Moreover, it is guaranteed by the government, which means your money is completely safe.

Major benefits of investing in SCSS

1. High and guaranteed returns

The interest rate of 8.2% offered by SCSS is better than FDs, as it is not affected by market fluctuations.

2. Guaranteed regular income

Under this scheme, interest is credited to the account every quarter, providing regular income to senior citizens.

3. Government protection

It is a government-backed scheme, so there is no risk of default or loss of money.

4. Tax exemption too

Investing in SCSS is eligible for tax exemption under Section 80C of the Income Tax Act, but the interest is taxable.

Who can invest in SCSS?

  • Individuals aged 60 years and above.
  • Those aged 55 to 60 who have taken VRS.
  • A joint account can also be opened, but the first account holder must be a senior citizen.

Investment limits and tenure

The minimum investment in SCSS starts from Rs. 1,000. The maximum investment limit is up to Rs 30 lakh. The tenure of this scheme is 5 years, which can be extended for 3 years.