After RBI's decision, FD interest rates have come down, now this post office scheme is offering bumper interest..

Interest rates on fixed deposits (FDs) have been continuously decreasing since the Reserve Bank of India (RBI) cut the repo rate by 1% in February. In such a situation, Senior Citizen Savings Scheme (SCSS) has emerged as a better investment option for senior citizens.

This scheme is completely safe as it is backed by the Government of India and offers attractive interest rates. Additionally, investing in SCSS also provides the benefit of tax exemption under Section 80C of the Income Tax Act. It is perfect for senior citizens who want both security and stable returns.

The Government of India reviews the interest rate on other small savings schemes, including SCSS, every quarter. Recently, the government has announced the interest rates of SCSS for the July to September quarter of the financial year 2025-26. According to the government, there has been no change in the interest rates of small savings schemes like Public Provident Fund (PPF), National Savings Certificate (NSC), and Senior Citizen Savings Scheme (SCSS).

The Finance Ministry said in a circular on June 30, 2025, that the interest rates on various small savings schemes for the second quarter of FY 2025-26 (1 July 2025 to 30 September 2025) will remain the same as the first quarter (1 April 2025 to 30 June 2025).

SCSS interest rate-
SCSS (Senior Citizen Savings Scheme) offers 8.2% annual interest, which comes to your account every quarter. Interest in FD (Fixed Deposit) can be received on maturity or monthly, quarterly, half-yearly, annually, depending on the rules of the bank. However, very few banks offer more than 8% interest on FD, especially some small finance banks.

PSU Banks-

- Karur Vysya Bank gives 7.25% interest to senior citizens.

- Indian Overseas Bank gives 7.45%.

- Punjab and Sindh Bank give 7.55% interest to senior citizens.

- Federal Bank gives 7.35% interest on FDs of 444 days.

Private Bank-

Axis Bank gives 7.25% interest to senior citizens on FDs of 5 years to 10 years.

HDFC Bank gives 7.1% on FDs of 18 months to at least 21 months.

ICICI Bank gives 7.1% interest on FDs of 2 years 1 day to 10 years.

Yes Bank gives 7.85% interest on FDs of 3 years to at least 5 years.

SCSS Tax Details-

The investment period in SCSS is 5 years (which can be extended by 3 more years). It provides tax exemption of up to Rs 1.5 lakh under section 80C. The maximum investment limit in this is Rs 30 lakh.

Rules for closing SCSS account-

Senior Citizen Savings Scheme (SCSS) account matures in 5 years. To close it, you have to submit the passbook and the prescribed form to the post office. If the account holder dies before maturity, the account will get interest at the rate of post office savings account from that date. However, if the account is joint or the spouse is nominated and they fulfill the conditions of SCSS, then they can continue it at SCSS rates till maturity.

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