Senior Citizen Savings Scheme (SCSS) Interest Rate July-September 2023: The SCSS interest rate for the July-September quarter of FY 2023-24 was announced today (June 30). The Government has decided to keep the SCSS interest rate unchanged at 8.2%.
Earlier, SCSS account holders were expecting a further hike in the interest rate. However, a fresh hike was unlikely as the SCSS interest rate was increased in the last two quarters. (See SCSS interest rate history). In the April-June quarter of FY 2023-24, the SCSS interest rate was 8.2%.
The SCSS account allows senior citizens to deposit up to Rs 30 lakh and receive quarterly interest income. They can also claim tax deductions under Section 80C of the Income Tax Act (subject to the limit of Rs 1.5 lakh per year). The interest earned from SCSS deposits is, however, taxable.
In the last two quarters, the Government has increased interest rates for Senior Citizen Savings Scheme (SCSS), National Savings Certificate (NSC), Sukanya Samriddhi Yojana (SSY) account, Kisan Vikas Patra (KVP), and Post Office deposit schemes like Post Office Time Deposit, Post Office Monthly Income Scheme (POMIS) and Post Office Recurring Deposit (RD). Only Public Provident Fund (PPF) interest rate has remained unchanged.
As the Reserve Bank of India (RBI) has paused the hike in the repo rate, which increased by 2.5% since May 2022, there was a very small possibility of a further hike in the SCSS interest rate today.
The interest rates of small savings schemes, including SCSS, are linked to yields of Government Securities (G-Secs). The Finance Ministry reviews the interest rates of small savings schemes like Senior Citizens Savings every quarter of a financial year. The review is done basis G-Secs yields of the previous three months.
The interest rates of most of the small savings schemes, including the Senior Citizen Savings Scheme, are already at par with fixed deposit interest rates offered by banks. Further, in view of RBI’s repo rate hike pause and falling inflation, experts believed there was not much room for an upward revision of the SCSS interest rate.