Senior Citizen Savings Scheme is a social security scheme that provides a financial safety net to individuals above 60 years of age.
In India, the number of senior citizens above the age of 60 years is estimated to touch 300 million by 2050. In a rapidly urbanising country, they also need more funds to sustain the lifestyle they are familiar with.
Senior Citizen Savings Scheme, a social security scheme, provides retirees with substantial funds to support their funding requirements and make them financially independent. SCSS is one of the highest-earning small savings schemes that currently exist.
|
Key Things to Know About SCSS |
|
|
Interest Rate |
8.2% pa |
|
Minimum Investment |
Rs 1000 |
|
Maximum Investment |
Rs 30 Lakhs |
|
Maturity Tenure |
5 Years |
The significantly high SCSS current interest rate may be the best thing about these accounts; however, they are not the only advantages.
All Senior Citizen Savings Schemes are government-backed, meaning that regardless of which financial institutions they are operated in, the returns will still be the same.
Most private and public sector banks and the Indian Post Office offer the advantages of these specific schemes for senior citizens.
Another reason why the scheme is useful is that it acts as a tax-saving instrument for those above 60 years of age.
Here is a brief overview of how the SCSS interest rates have varied over the previous years.
|
Time Period |
Interest Rate (% annually) |
|
January to March (Q4 FY 2023-24) |
8.2 |
|
October to December (Q3 FY 2023-24) |
8.2 |
|
July to September (Q2 FY 2023-24) |
8.2 |
|
April to June (Q1 FY 2023-24) |
8 |
|
January to March (Q4 FY 2022-23) |
8 |
|
October to December (Q3 FY 2022-23) |
7.6 |
|
July to September (Q2 FY 2022-23) |
7.4 |
|
April to June (Q1 FY 2022-23) |
7.4 |
|
January to Mar (Q4 FY 2021-22) |
7.4 |
|
Oct to Dec (Q3 FY 2021-22) |
7.4 |
|
July to Sep (Q2 FY 2021-22) |
7.4 |
|
April to June (Q1 FY 2021-22) |
7.4 |
|
January to March 2021 (Q4 FY 2020-21) |
7.4 |
|
Oct to Dec 2020 (Q3 FY 2020-21) |
7.4 |
|
Jul to Sep 2020 (Q2 FY 2020-21) |
7.4 |
|
Apr to Jun 2020 (Q1 FY 2020-21) |
7.4 |
|
January to March (Q4 FY 2019-20) |
8.6 |
|
Oct to Dec 2019 (Q3 FY 2019-20) |
8.6 |
|
Jul to Sep 2019 (Q2 FY 2019-20) |
8.6 |
|
Apr to Jun 2019 (Q1 FY 2019-20) |
8.7 |
The SCSS interest rate currently stands at 8.2%. This rate is revised once every 3 months and thus is subject to change four times a year.
The Reserve Bank of India’s Monetary Planning Committee meets at periodic intervals, and the rates of interest applicable are drawn up based on prevailing economic conditions.
As an example, let us assume Mr. Sharma has decided to invest Rs. 15 Lakh, the maximum permissible limit, in his Senior Citizen Savings Scheme. After the tenure of 5 years, the total earnings (interest + principal amount) will stand at (Rs. 15,00,000*1.086)*5 = Rs. 22.65 Lakh.
Mr. Sharma can also avail of quarterly payments. For example, if he decides to invest Rs. 1 Lakh for 5 years at the current SCSS interest rate, the total maturity amount will be Rs. 1.43 Lakh. Of this, the total interest is Rs. 43,000. The quarterly receivable amount will be Rs. 2,150.
Anyone above the age of 60 who wishes to save enough for the years post-retirement is eligible to open an SCSS account. Those who are planning to take advantage of the high SCSS interest rate in 2025, can invest in this scheme.
An SCSS is an investment option for those wishing to think long-term. It is also essential to remember that a senior citizen can also open this account in joint ownership, but only with her or his spouse.