Budget 2023: FM proposes to double Senior Citizens Saving Scheme (SCSS) deposit limit
Finance Minister Nirmala today extended the maximum deposit for the senior citizens saving scheme
PremiumBudget 2023: The Finance Minister Nirmala today announced to extend the maximum deposit limit for the Senior Citizens Saving Scheme. “The senior citizens saving scheme will be extended for a deposit account of ₹30 lakh from ₹15 lakh," announces Finance Minister Nirmala Sitharaman while presenting the Union Budget in the parliament.
Earlier, in this government of India backed small saving scheme had deposit limit of ₹15 lakh and interest rate given on this risk-free small saving scheme is 7.40 per cent per annum. This SCSS interest rate of 7.40 per cent per annum is comparatively higher than normal returns being given by bank fixed deposits or FDs. The SCSS interest is payable on quarterly basis this means on 31st March, 30th June, 30th September and 31st December of every financial year. However, the Senior Citizens Saving Scheme has a lock in period of five years. But, in case of financial requirements, premature withdrawal is allowed.
A person who has attained 60 years of age is eligible to open a Senior Citizens Saving Scheme or SCSS account in nearest bank or post office. But, an individual who is above 55 years of age but below 60 years and has retired on superannuation is eligible for opening SCSS account.
The Senior Citizens Saving Scheme has a maturity period of five years. But, a depositor can extend one's maturity period for another three years. For extending one's Senior Citizens Saving Scheme account, the depositor needs to submit an application form in the given format within one year of the maturity period.
A depositor can invest in Senior Citizens Saving Scheme in an upfront single deposit. Cash deposit is allowed on amount below ₹1 lakh whereas ₹1 lakh or above amount is accepted through cheque and deposit date is considered from the cheque realisation date.
Pre-matured withdrawal is allowed in Senior Citizens Saving Scheme after one year of account opening. If a depositor opts for pre-mature withdrawal after one year but before two years, then 1.5 per cent charge is applicable on the principal amount deposited in the SCSS account. However, in case of SCSS account of over two years old, the pre-mature withdrawal charges applicable would be one per cent of the net deposited amount at the time of account opening.
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