Every rate below is the notified Q2 FY 2026-27 rate. Every tax number is worked to the rupee.
Short answer: parked across SCSS, POMIS and senior-citizen FDs at today's notified rates, a ₹20 Lakh corpus pays about ₹12,800 a month (₹1,53,600 a year) without touching principal. Income tax on it: nil.
Rates are for Q2 FY 2026-27 (Jul-Sep 2026), unchanged for the 10th straight quarter · New tax regime, FY 2026-27 · Figures are indicative, as of August 2026
This is a reference allocation, not advice — your health costs, family support and risk appetite move the pieces. What does not move is the arithmetic.
| Where it sits | Amount | Rate | Interest / year | Paid out |
|---|---|---|---|---|
| SCSS (post office or bank) | ₹18,00,000 | 8.2% | ₹1,47,600 | Quarterly |
| Savings + sweep FD (emergency) | ₹2,00,000 | 3.0% | ₹6,000 | On demand |
| Total | ₹20,00,000 | — | ₹1,53,600 | ≈ ₹12,800/month |
SCSS pays quarterly simple interest; POMIS pays monthly; FD assumes a large-bank senior rate of 7.25% (typical Aug 2026 range 6.75–7.30%). SCSS and POMIS rates are government-notified for Q2 FY 2026-27.
Interest of ₹1,53,600 against the new regime: nil — the interest stays below the ₹4 lakh basic exemption of the new regime, so no tax is due even before any rebate.
TDS is a separate machine from tax. Any single payer (a bank, or the post office as one payer) that credits you more than ₹1 lakh of interest in the year must deduct 10% — even when your final tax is nil. Form 121, filed at the start of the year with each payer, switches that deduction off when your liability is zero.
You could — the SCSS ceiling is ₹30 lakh, so the whole corpus fits. The reason to hold ₹2 lakh outside is that SCSS money is genuinely locked: closing before one year forfeits interest, and closing between one and two years costs 1.5% of the deposit. A retiree with no liquid buffer ends up breaking the very deposit that pays the pension. Two lakh in a sweep FD is the price of never touching the SCSS account.
At ₹20 lakh, roughly ₹12,800 a month is a supplement, not a full income — it assumes a pension, rent, or family support covers the base. What breaks this plan is quietly spending principal in the gap years and re-fixing a smaller corpus at each maturity. The SCSS quarterly credit is designed to be spent; the ₹2 lakh buffer is designed to be refilled. Keeping those two roles separate is the entire discipline this size of corpus needs.
Three resets are built in: SCSS matures at year 5 (then extends in 3-year blocks at the then-prevailing rate), POMIS matures at year 5, and each FD at its own term. Small-savings rates are reviewed every quarter — they have not moved since January 2024, but each reset re-prices your income at whatever is then notified. Revisit the ladder at every maturity, not every headline.
About ₹12,800 a month at current notified rates, using SCSS at 8.2%, POMIS at 7.4% and senior bank FDs around 7.25% — without spending principal.
Total interest is about ₹1,53,600 a year. nil — the interest stays below the ₹4 lakh basic exemption of the new regime, so no tax is due even before any rebate.
Yes, wherever one payer credits over ₹1 lakh of interest in the year — unless you file Form 121 (the declaration that replaced Form 15H from 1 April 2026) with that payer at the start of the financial year.
No. SCSS locks its rate for your 5-year term, POMIS for its term, FDs until maturity. Each renewal re-prices at the rate then notified — the government reviews small-savings rates every quarter.
Related: All corpus levels · Senior FD rates · Form 121 · FD Calculator
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Written and checked by the PaisaSamajh editorial desk · Last reviewed: 24 August 2026 · How we check this →