Where to Put ₹5, 10, 20, 25 or 30 Lakh at Retirement: SCSS, Post Office MIS or Bank FD, and the Monthly Income Each Pays After Tax

At retirement the question changes from "how much will this grow?" to "how much will it pay me every month?". For a lump sum kept safe, three choices come up first: the Senior Citizens' Savings Scheme (SCSS), the Post Office Monthly Income Scheme (MIS) and a bank fixed deposit. Put ₹30 lakh in SCSS and it pays ₹61,500 every quarter, about ₹20,500 a month. An SBI fixed deposit at the senior citizen rate pays ₹17,625 a month on the same amount. MIS pays every month, but one person can put only ₹9 lakh into it, for ₹5,550 a month. And for most retirees, the new tax regime takes nothing from this income.

Written on 21 October 2026. Post Office rates are the ones India Post lists for the quarter running to 31 December 2026; the National Savings Institute's records show no change in them since 1 January 2024. SBI rates are its card rates for senior citizens on deposits below ₹3 crore, in force from 15 December 2025 (SBI's page was last updated on 19 October 2026). Tax follows the new Income-tax Act, for the tax year 2026-27. Every income figure below comes from the site's FD, RD and Post Office calculator, and every tax figure from its income tax calculator.

Monthly income from ₹5 lakh to ₹30 lakh: SCSS, MIS, FD and Time Deposit

The table shows what each amount pays if it all goes into one scheme. SCSS and the bank FD pay every quarter, so the monthly figure is the quarter's interest divided by three. The 5-year Post Office Time Deposit pays once a year.

Three things stand out. SCSS pays the most at every amount: on ₹30 lakh it earns ₹1,72,500 more than the SBI FD over five years. MIS is the only one that pays every month, but its ceiling makes it a part of the plan, never all of it, once you have more than ₹9 lakh. And the Time Deposit sits in between on rate (its interest is compounded quarterly and paid once a year, which works out to about 7.71%), but the cash arrives only once a year.

A depositor aged 80 or more gets 10 basis points more from SBI on a term deposit (SBI Patrons, 7.15% for five years), about ₹250 a month more on ₹30 lakh. SBI also pays FD interest monthly if you ask, at a slightly discounted rate, so the monthly cheque is a little below the quarterly figure divided by three. Other banks pay other rates; check yours in the calculator.

SCSS vs Post Office MIS vs bank FD: how the three differ

The case for SCSS: the highest rate of the three, fixed for five years from the day you deposit, and backed by the Government of India. The case against: the money pays out only quarterly, it is open only to those 60 and over (or retired from 55), it is capped at ₹30 lakh a person, and a rate locked for five years also means you face whatever rate is on offer when it matures.

The case for MIS: a fixed amount lands every month, which is how most household bills arrive, and anyone can open it. The case against: a lower rate than SCSS and a ₹9 lakh ceiling for one person, so it can carry only part of a larger corpus.

The case for a bank FD: it can be broken at short notice for a small penalty, and you choose the term, up to ten years. The case against: the lowest rate of the three at SBI, and the deposit insurance stops at ₹5 lakh per bank, so a large sum belongs in more than one bank.

One way to split each amount

A common way to divide a retirement lump sum among the three is by job: MIS for the monthly cash, SCSS for the highest rate, and a bank FD you can break for a hospital bill or a repair. The splits below are an illustration of that logic, worked out to the rupee, not a recommendation; the right mix depends on your pension, your other savings and your health.

The split gives up a little income for flexibility. On ₹30 lakh it pays ₹19,612 a month against ₹20,500 from SCSS alone, about ₹900 a month less, in exchange for a monthly payment from MIS and ₹3 lakh you can reach in a day. Every split averages between 7.7% and 7.9% a year. With ₹5 lakh, a monthly MIS payment of a few hundred rupees adds little, so the example keeps it out; with ₹10 lakh it adds ₹1,850 a month.

How much tax you pay on SCSS, MIS and FD interest

Interest from all three counts as income and is taxed at your slab rate. What surprises many retirees is how often that comes to nothing. Under the new regime (section 202 of the Income-tax Act, 2025), the rebate under section 156 wipes out the tax on a taxable income of up to ₹12 lakh, and a pension gets the ₹75,000 standard deduction like a salary. So while your pension and interest together stay within ₹12.75 lakh a year, the new regime charges no tax. Without a pension, the limit is ₹12 lakh of interest and other income.

Here is the tax on the interest from ₹30 lakh in SCSS (₹2,46,000 a year), for a retiree aged 60 to 79 with no other income, in the tax year 2026-27:

The old-regime column already gives the two deductions it allows a retiree: up to ₹50,000 of interest on deposits with a bank, co-operative bank or post office, under section 153 (formerly 80TTB), and the SCSS deposit itself, up to ₹1.5 lakh, under section 123 (formerly 80C), which counts only in the year you deposit. Even with both, the new regime costs less in every row here, because its slabs are wider and its rebate larger. The new regime allows neither deduction. With ₹10 lakh in SCSS (₹82,000 a year) and a ₹1 lakh pension, the new regime's tax is only ₹7,280, thanks to the relief just above the ₹12 lakh mark. Larger old-regime deductions, such as health insurance or a home loan, can change the answer, so put your own figures in both regimes. The new regime's slabs and the old against the new are set out separately.

TDS on SCSS and FD interest, and Form 121

A bank, a co-operative bank or a post office deducts 10% tax at source once a senior citizen's interest from it crosses ₹1 lakh in a year (₹50,000 for others), under section 393(1) of the 2025 Act. That line is crossed sooner than it sounds: ₹20 lakh in SCSS earns ₹1,64,000 a year, and ₹20 lakh in an SBI FD ₹1,41,000. ₹10 lakh earns less than ₹1 lakh in either, and ₹9 lakh in MIS earns ₹66,600.

TDS is not an extra tax. It is credited against your tax for the year and refunded through the return if you owe less. If your tax for the year will be nil, you can stop the deduction in advance: give the bank or post office a declaration in Form 121 under section 393(6). It replaces the old Forms 15G and 15H, which many branches and websites still mention.

One relief for older depositors: a resident aged 75 or more whose only income is a pension and interest from the same bank that pays the pension, and who gives that bank a declaration, need not file a return; the bank works out and deducts the tax (sections 263(8)(b) and 402(39)). SCSS interest from a post office, or FD interest from a second bank, takes you outside that rule.

For a couple: up to ₹60 lakh in SCSS

The ₹30 lakh SCSS limit is for each person. The scheme's rules let both spouses open their own accounts, up to ₹30 lakh each, if both are eligible, so a couple can place ₹60 lakh: ₹1,23,000 a quarter, about ₹41,000 a month. A joint SCSS account is counted wholly against the first holder, so the second spouse's own account is what raises the limit. MIS works differently: a joint account takes up to ₹15 lakh (₹9,250 a month at 7.4%), and each holder's share counts towards their own ₹9 lakh limit.

Splitting between spouses can also lower the tax: interest is taxed in the hands of the person whose account it is, provided that spouse's own money funds the deposit. Money one spouse gifts to the other for this is taxed back in the giver's hands under the clubbing rule, which the gift tax guide explains.

Getting money out early: what each one costs

• SCSS: close it within the first year and the interest already paid is taken back from the deposit. In the second year 1.5% of the deposit is deducted (₹45,000 on ₹30 lakh); after two years, 1% (₹30,000).
• Post Office MIS: it cannot be closed in the first year. After that, 2% of the deposit is deducted before three years (₹18,000 on ₹9 lakh) and 1% after (₹9,000).
• SBI FD: it can be closed at any time. SBI then pays a rate 0.50% below the one for the time the money actually stayed (1% below, above ₹5 lakh), and no interest at all on money withdrawn within 7 days.

This is why the bank FD earns a place in most splits despite its lower rate: it is the one you can reach quickly without losing much. How large that reserve should be is a separate question, worked through in the emergency fund guide.

Five things to weigh before you choose

1. Monthly or quarterly cash. If the household runs on a monthly budget, MIS or a monthly-payout FD matches it; SCSS pays four times a year.
2. What happens after five years. SCSS and MIS lock today's rate for five years. When SCSS matures, you can extend it for three years at the rate on offer that day; that rate may be higher or lower. An FD can run for up to ten years.
3. Inflation. None of these payments rises with prices. ₹20,500 a month buys less every year, which is why a long retirement is often planned in stages; the 4% rule and sequence risk explain the trade-offs of drawing from a corpus that also holds growth assets.
4. ₹5 lakh per bank. DICGC's cover is ₹5 lakh for each depositor at a bank, interest included, with every branch of that bank counted together. A ₹10 lakh FD is better as two ₹5 lakh deposits in two banks. SCSS and MIS are Government of India schemes, outside this limit.
5. Nomination and the paperwork. Add a nominee to every account, keep a list of where each deposit sits, and give Form 121 at the start of each financial year if your tax will be nil.

Frequently Asked Questions

How much monthly income will I get on ₹30 lakh in SCSS? At 8.2%, ₹61,500 a quarter, which is ₹20,500 a month on average and ₹2,46,000 a year. The money comes in four payments a year, on the opening working day of January, April, July and October, rather than twelve.

What is the SCSS interest on ₹10 lakh? ₹20,500 a quarter, or ₹82,000 a year, about ₹6,833 a month. On ₹5 lakh it is ₹10,250 a quarter; on ₹20 lakh, ₹41,000; on ₹25 lakh, ₹51,250.

Can I invest ₹30 lakh in Post Office MIS? No. MIS takes at most ₹9 lakh in an account in one name and ₹15 lakh in a joint account, across all your MIS accounts. ₹9 lakh pays ₹5,550 a month at 7.4%, and ₹15 lakh pays ₹9,250.

Which is better for senior citizens, SCSS or FD? SCSS pays more: 8.2% against SBI's 7.05% for a 5-year senior citizen FD, ₹1,72,500 more on ₹30 lakh over five years. An FD is easier to break and has no upper limit, but deposit insurance covers only ₹5 lakh per bank. Many retirees use both.

Is SCSS interest taxable? Yes, at your slab rate, every year it is paid. Under the new regime most retirees owe nothing, since pension and interest of up to ₹12.75 lakh a year carry no tax after the rebate. In the old regime, a senior citizen can deduct up to ₹50,000 of deposit interest under section 153.

Is TDS deducted on SCSS interest? Yes, at 10%, once the interest from that post office or bank crosses ₹1 lakh in a year for a senior citizen. ₹20 lakh or more in SCSS crosses it. If your total tax will be nil, a Form 121 declaration stops the deduction.

Can husband and wife both invest ₹30 lakh in SCSS? Yes, each in their own account if both are eligible, ₹60 lakh between them, paying about ₹41,000 a month together. A joint account counts entirely against the first holder's ₹30 lakh.

What is the SBI FD rate for senior citizens? For deposits below ₹3 crore: 6.75% for 1 to 2 years, 6.90% for 2 to 3 years, 6.80% for 3 to 5 years and 7.05% for 5 to 10 years, the last including SBI's 50-basis-point We-care premium. Depositors aged 80 or more get 10 basis points more on a term deposit.

Can SCSS be closed before 5 years? Yes, at any time. Within the first year the interest already paid is recovered; in the second year 1.5% of the deposit is deducted; after two years, 1%.

Does a senior citizen with only pension and interest need to file an ITR? A resident aged 75 or more need not, if the pension and the interest come from the same bank and a declaration is given to that bank, which then deducts the tax. Others file a return if their income crosses the exemption limit or tax has been deducted that they want back.

Rates are those India Post, the National Savings Institute and SBI publish for October to December 2026; the Government revises Post Office rates every quarter, and a deposit keeps the rate it was opened at. Tax figures apply the new Income-tax Act to the tax year 2026-27, for a resident aged 60 to 79 with no income other than the pension and interest shown, and ignore surcharge. The splits are worked examples, not recommendations. For a decision about your own savings, take advice that looks at your whole position.

Sources

The rules and figures in this article can be checked against these official sources.

• Post Office savings schemes: interest rates and terms India Post
• Interest rates on National Savings Schemes, quarter by quarter National Savings Institute, Ministry of Finance
• Senior Citizens’ Savings Scheme: eligibility, limit, payout and closure National Savings Institute, Ministry of Finance
• Senior Citizens’ Savings Scheme, 2019, as amended Ministry of Finance (G.S.R. 916(E), 12 December 2019)
• National Savings (Monthly Income Account) Scheme: limits and premature closure National Savings Institute, Ministry of Finance
• National Savings (Monthly Income Account) Scheme, 2019, as amended Ministry of Finance (G.S.R. 917(E), 12 December 2019)
• Retail domestic term deposits below ₹3 crore: interest rates State Bank of India
• SBI Term Deposit: features, interest payout and premature closure State Bank of India
• A guide to deposit insurance: ₹5 lakh per depositor per bank Deposit Insurance and Credit Guarantee Corporation
• Income-tax Act, 2025, section 153: deduction for interest on deposits, ₹50,000 for a senior citizen (formerly 80TTB) Income Tax Department
• Income-tax Act, 2025, section 123: deduction for life insurance, provident fund and similar payments Income Tax Department
• Income-tax Act, 2025, section 202: the new tax regime Income Tax Department
• Income-tax Act, 2025, section 156: rebate of income-tax Income Tax Department
• Income-tax Act, 2025, section 393: tax to be deducted at source Income Tax Department
• Income-tax Act, 2025, section 263: return of income and its due dates Income Tax Department
• Old and new section, rule and form numbers: the department’s mapping utility Income Tax Department