What is Senior Citizens’ Savings Scheme?
The Senior Citizens’ Savings Scheme (SCSS) is a government-backed savings scheme for people aged 60 and above. You deposit a lump sum once, and it pays you interest every quarter for 5 years.
The interest is paid into your savings account on the first working day of April, July, October and January. At the end of the 5 years, you get your full deposit back, and you can extend the account for another 3 years.
With one of the highest interest rates among small savings schemes, SCSS is a popular choice for a safe, regular income after retirement.
Good to know
Retired employees aged 55 to 60 can also open an account, if they invest within a month of receiving their retirement benefits.
What is an SCSS Calculator?
An SCSS calculator works out the interest you will receive every quarter, the total interest over 5 years, and the total you will receive, based on the amount you invest.
Why you should use an SCSS Calculator?
- Plan your retirement income: Know exactly how much you will receive every three months.
- Choose how much to invest: Work out how much to deposit for the income you need, up to the ₹30,00,000 limit.
- Compare with other options: Compare SCSS income with the Post Office MIS or senior citizen fixed deposits.
How Does an SCSS Calculator Work?
The calculator works on the following inputs:
- Amount Invested: The lump sum you deposit, from ₹1,000 to ₹30,00,000, in multiples of ₹1,000.
- Time Period: 5 years.
- Rate of Interest: The current rate, set by the government.
The calculator relies on the following formulas:
Quarterly Interest = Amount Invested × Rate of Interest ÷ 4 ÷ 100
Total Interest = Quarterly Interest × 20
The interest is paid out every quarter, so it doesn’t compound. The maturity value is your deposit plus all the interest you receive over 5 years.
Formula to Calculate SCSS with an Example
Consider an example for a better understanding.
- Amount Invested: ₹10,00,000
- Rate of Interest: 8.2% per annum
Using the formula:
Quarterly Interest = 10,00,000 × 8.2 ÷ 4 ÷ 100
After calculation, you receive ₹20,500 every quarter, or ₹4,10,000 over 5 years. Your ₹10,00,000 is paid back at the end.
Things to keep in mind
- Tax benefit: Deposits up to ₹1,50,000 a year can be claimed as a deduction under Section 80C in the old tax regime.
- Interest is taxable: The interest is taxed at your slab rate. TDS is deducted if your interest is more than ₹1,00,000 in a year, unless you submit Form 15H.
- Rate is locked in: The rate on the day you invest stays the same for the full 5 years, even if the government changes it later.
- Early closure: You can close the account early, but a penalty of 1.5% of the deposit applies in the first 2 years, and 1% after that.