Report Wire - Senior Citizen Savings Scheme: Will govt hike SCSS rate of interest above 8%

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Senior Citizen Savings Scheme: Will govt hike SCSS rate of interest above 8%

2 min read
In December, the interest rate for the SCSS for the last quarter of the fiscal year 2022–23 was changed.

Senior Citizen Savings Scheme (SCSS) rate of interest: Given the following revision of the rates of interest of Small Savings Schemes scheduled to happen by the tip of the month, senior residents are hoping that the Government might additional improve the the Senior Citizen Savings Scheme (SCSS) rate of interest.

In December, the rate of interest for the SCSS for the final quarter of the fiscal yr 2022–23 was modified. Currently, it affords an rate of interest of 8%.

Amit Gupta, MD, SAG Infotech mentioned it’s unlikely that the SCSS rate of interest would rise additional.

Vinit Khandare, CEO & Founder, MyFundBazaar India Private Limited additionally agreed with Gupta. Further upward revision within the SCSS rate of interest is unlikely. While it’s anticipated that the federal government might improve the rate of interest on shorter-duration small financial savings schemes as a result of an uptick in G-Sec yield, because the SCSS rate of interest was revised very lately, one other revision just isn’t anticipated, he mentioned.

Steep will increase in coverage charges have been noticed over the previous few quarters, whereas the rates of interest supplied on the Senior Citizens Savings Scheme (SCSS) have additionally been rising, albeit at a slower tempo. According to Nirav Karkera, Head of Research, Fisdom, the hole between risk-free charges and the charges supplied by SCSS has been shrinking.

“In gentle of the elevated inflation ranges, it appears important to lift the SCSS charges to safeguard the monetary pursuits of senior residents. The present financial local weather presents a robust case for rising the rates of interest on this scheme,” added Nirav Karkera.

Meanwhile, the Government is expected to soon notify the new investment limit for the SCSS scheme, announced in Budget 2023, however a formal notification on this announcement is still due. The Finance Minister Nirmala Sitharaman stated in her budget that senior citizens will be allowed to deposit up to ₹30 lakh in their SCSS accounts.

“By investing ₹30 lakh in their SCSS accounts, senior citizens can earn up to ₹20,000 per month in interest income, while senior citizen couples can earn up to ₹40,000 per month in combined interest income by depositing Rs. 30 lakh in each of their separate SCSS accounts,” mentioned Amit Gupta.

The SCSS account lends a serving to hand to senior residents by offering assured charge of pursuits at 8% maturing in 5 years. It might be prolonged by the account holder for one more interval of three years.

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