SCSS interest rate change expectation: Senior Citizen Savings Scheme (SCSS) interest rate was revised in December for the fourth quarter of FY 2022-23. Currently, senior citizens can get 8% interest on their deposits under the scheme.
With the next revision of the interest rates of Small Savings Schemes scheduled to take place by the end of this month, senior citizens are hoping that the Government may further increase the SCSS interest rate. In past, SCSS has offered up to 9.3% interest.
However, further upward revision in the SCSS interest rate is unlikely. The Financial Express reported earlier that the Government may not increase the interest rates for small savings schemes like Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY).
However, it is expected that the Government may increase the interest rate on some shorter-duration small savings schemes due to a rise in G-Sec yield. However, as the SCSS interest rate was revised very recently, another revision is not expected.
The small savings scheme interest rates applicable for the first quarter of FY 2023-24 will be notified by the end of this month.
Meanwhile, the Government is expected to soon notify the new investment limit for the SCSS scheme, which was announced in Budget 2023. Finance Minister Nirmala Sitharaman had said in her budget speech that senior citizens will be allowed to deposit up to Rs 30 lakh in their SCSS accounts. A formal notification on this announcement is still due.
A calculation shows that senior citizens can get up to Rs 20,000 per month as interest income by depositing Rs 30 lakh in their SCSS accounts whereas senior citizen couples can get up to Rs 40,000 monthly combined interest income by depositing Rs 30 lakh each in their separate SCSS accounts.
The SCSS account helps senior citizens by providing assured returns at 8% interest rate (currently). The SCSS account matures in 5 years and it can be extended by the accountholder for another three years.