SCSS Interest Rate: The Senior Citizen Savings Scheme (SCSS) has been giving an 8.2% interest rate for more than three years. The rate was last changed on April 1, 2023. Since then, it has stayed the same through 13 straight quarters. The next decision is due on September 30, when the government will announce small savings rates for October to December 2026.
SCSS is made for people aged 60 years and above. Some retired civilian employees can also open it from the age of 55, while retired defence personnel can qualify from 50. A person can invest from ₹1,000 up to ₹30 lakh. The account normally runs for five years and can then be extended by another three years.
Interest is paid every three months. At the current 8.2% rate, a ₹30 lakh deposit gives around ₹61,500 every quarter. That’s about ₹20,500 a month when averaged out. Over five years, the total interest comes to around ₹12.3 lakh.
Bank Strike September 28-30: Are Banks Closed For 5 Days?
For people using the old tax regime, SCSS deposits can qualify for a Section 80C deduction. But the interest earned is taxable. The TDS threshold for senior citizens on interest paid by banks or post offices was raised to ₹1 lakh from April 1, 2025.
How is The SCSS Rate Decided?
The SCSS rate is linked to the five-year government security yield. The Shyamala Gopinath Committee had recommended a spread of 100 basis points over the five-year G-sec rate. The government later adopted a market-linked system for small savings rates.
For the July-September 2026 quarter, the five-year G-sec yield has been around 6.5%. Adding the 100-basis-point spread gives a formula-based rate of roughly 7.5%. That’s below the current SCSS rate of 8.2%.
| Item | Value (approx.) |
|---|---|
| 5-year G-sec yield, July-September 2026 average | ~6.5% |
| Spread for SCSS | +100 bps |
| Formula-implied rate | ~7.5% |
| Actual SCSS rate | 8.2% |
| Gap | ~70 bps |
The 10-year government bond yield has also moved higher and was around 7.1% recently. Higher bond yields can push up the rate suggested by the formula.
Why Has The Government Kept SCSS At 8.2%?
The government doesn’t have to follow the formula automatically. It can decide whether to change or keep small savings rates. For now, it has repeatedly kept the rates unchanged. The Department of Economic Affairs also kept all small savings rates unchanged for the July-September 2026 quarter.
Small savings money is also linked with the National Small Savings Fund (NSSF). Deposits collected through these schemes are credited to the NSSF. The fund invests in government securities and helps finance government borrowing.
RD Interest Rates: These Banks Offer Up to 8.25% on Recurring Deposits
This means SCSS savers will have to wait for the September 30 announcement to know whether the 8.2% rate will continue for October-December 2026. The formula points to a lower rate, but the government has previously kept SCSS above the formula-based level, so the final decision remains with the government.
