Comparison of income from SCSS and MIS schemes on an investment of ₹15 lakh

According to a report by Economic Times, if senior citizens have a sum of ₹15 lakh to invest and wish to earn a regular income, they have two popular options available: the Senior Citizens Savings Scheme (SCSS) and the Post Office Monthly Income Scheme (MIS). Both are government-backed small savings schemes and both have a maturity period of five years.

However, there are significant differences between these two schemes in terms of interest rates, payment frequency, and maximum investment limits. An analysis has been conducted to determine which scheme can provide more income if the investment amount is ₹15 lakh. No changes have been made to the interest rates applicable for the quarter from 1 October to 31 December, 2026.

The SCSS scheme offers an annual interest rate of 8.2%, while the Post Office MIS scheme offers an interest rate of 7.4%. Comparing interest rates, SCSS appears to be a better option, but MIS is ahead in terms of payment frequency. As the name suggests, MIS pays interest every month, whereas SCSS investors receive payments every three months (quarterly).

There is also a difference in investment limits. An individual can invest up to a maximum of ₹30 lakh in an SCSS account. On the other hand, the maximum investment limit for an individual MIS account is ₹9 lakh. However, if a joint account is opened in MIS, the maximum investment limit is up to ₹15 lakh.

If an investor invests ₹15 lakh in SCSS, they will receive approximately ₹30,750 as interest every quarter. Thus, during the five-year investment period, the total estimated interest income will be ₹6,15,000. This income will be paid to the investor in quarterly instalments and the principal amount will be returned upon maturity.

If an investment of ₹15 lakh is made in a joint MIS account, the calculation will be different. With an annual interest rate of 7.4%, the investor will receive approximately ₹1,11,000 as annual interest. This means the investor will receive approximately ₹9,250 every month as interest for five years. At the end of five years, the total interest income will be approximately ₹5,55,000 and the principal amount of ₹15 lakh will be returned upon maturity.

A direct comparison of both schemes reveals that the SCSS scheme provides higher interest income than MIS. On an investment of ₹15 lakh, the annual income through SCSS is ₹1,23,000, while the annual income through MIS is ₹1,11,000. Talking about the total interest over five years, SCSS provides ₹6,15,000 and MIS provides ₹5,55,000. Thus, if an investor chooses SCSS instead of MIS, they can earn ₹60,000 more interest in five years.

These calculations are based on the assumption that the investor will keep the investment in the scheme for five years and will not re-invest the interest amount. Additionally, in the case of MIS, it is assumed that the investment is made in a joint account with a maximum limit of ₹15 lakh.

An SCSS account can be opened by individuals above 60 years of age, but there are also some exceptions for retired employees below 60 years of age.

The Senior Citizens Savings Scheme (SCSS) was a savings scheme launched by the Government of India for senior citizens. The main objective of this scheme was to provide a secure and regular income to senior citizens.