Union Budget 2023: Senior Citizens Savings Scheme deposit limit raised to Rs 30 lakh from Rs 15 lakh

Budget announcement: Finance Minister Nirmala Sitharaman has said that the government will hike the Senior Citizens Savings Scheme upper limit from Rs 15 lakh to Rs 30 lakh. The government recently revised the interest rates for the scheme to 8 per cent per annum for the fourth quarter (January-March) of FY2022-23. 

SCSS is a Centre-sponsored savings tool for senior citizens, which was floated in 2004 in a bid to provide senior citizens with a steady and secure source of income post-retirement. It is a very popular and one of the most lucrative savings schemes at present.

“One of the positive moves this Budget was for senior citizens where the maximum investment limit for Senior Citizen Savings Scheme accounts has doubled from 15 lakhs to Rs 30 lakh. This scheme currently offers an 8.0 per cent per annum. This positive move will give senior citizens who are usually conservative investors. This will help them invest up to Rs 30 lakh with a handsome return at 8 per cent,” said Manish P. Hingar, Founder at Fintoo.

Besides, the government will also launch a new small savings scheme, Azadi ka Amrit Mahotsav Mahila Sammaan Bachat Patra, for women.

The one-time new small savings scheme will be made available for a two-year period up to March 2025. This will offer a deposit facility of up to Rs 2 lakh for a tenure of two years with an interest rate of 7.5 per cent with partial withdrawal allowed.

Features of SCSS

The government revises the interest rate on the Senior Citizen Savings Scheme every quarter, which largely depends on factors such as the prevalent rates in the market, inflation level, and others. The interest rate declared during the time of investment is fixed and doesn’t change throughout the maturity tenure.

The minimum deposit for the scheme is Rs 1,000, while the deposit quantum has been revised to Rs 30 lakh in this Budget, which was Rs 15 lakh before.

The maturity tenure for the scheme is 5 years. It can be extended for another 3 years. If the investor wants to close the account and withdraw the amount prematurely, then he can do that after one year of account opening. 

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