Impact of SCSS Deposit Limit and Interest Rate Changes in 2023: The Government of India hiked the deposit limit and interest rate for the Senior Citizen Savings Scheme (SCSS) this year. For the July-September quarter, the SCSS scheme is offering 8.2% interest, which is likely to remain unchanged in the October-December quarter of FY 2023-24 (read why).

The scheme now also allows senior citizens to deposit up to Rs 30 lakh per person for a period of 5 years. This tenure can be extended for another 3 years. The enhanced deposit limit means a senior citizen couple (husband+wife) can have separate SCSS accounts in their names and deposit Rs 30 each in both accounts.

Moreover, senior citizen couples can use this scheme to protect the principal amount while earning interest income for day-to-day needs. Calculation shows that at the current 8.2% interest, SCSS can give senior citizen couples an interest income of up to Rs 1366 per day. Here’s a look at how this works:

But first, let’s suppose a senior citizen couple has invested Rs 30 lakh each in their separate SCSS accounts.

The SCSS calculator shows that Rs 30 lakh in one account will earn a total interest income of Rs 12.3 lakh in 5 years, which is equal to Rs 2.46 lakh per year for 5 years.

However, SCSS interest income is credited to the savings account of the depositor every quarter. The quarterly amount to be credited against the Rs 30 lakh deposit will be Rs 61,500. This amount can be withdrawn from the savings account as and when required by the SCSS account holder. The total quarterly interest income from both accounts will be Rs 123,000 (Rs 61,500×2). In daily terms, this amount works out to be approximately Rs 1366 per day (Rs 123,000/90).

Also Read: Senior Citizen Savings Scheme (SCSS) interest rate revision in September. Will it go over 8.2%?

The higher deposit limit and increased interest rate have also made SCSS one of the best options for recently retired employees who want to deploy a large sum in a scheme that not only protects the principal but also gives good returns in the form of interest income.

Have any queries related to SCSS or any other small savings schemes? Write to fe.money@financialexpress.com. We will get them answered by experts.