Disadvantages of Senior Citizen Savings Scheme
Disadvantages of Senior Citizen Savings Scheme
May 10, 2023
Rajeev Kumar
Like every other investment option, Senior Citizen Savings Scheme (SCSS) also has some limitations or disadvantages. Read on to find out
Like every other investment option, Senior Citizen Savings Scheme (SCSS) also has some limitations or disadvantages. Read on to find out
1. Interest earned from SCSS deposits becomes taxable if it is more than Rs 50,000 in a financial year.
1. Interest earned from SCSS deposits becomes taxable if it is more than Rs 50,000 in a financial year.
2. Current interest rate of SCSS is 8.2%. But those who opened the account earlier at a lower rate are at a disadvantage.
2. Current interest rate of SCSS is 8.2%. But those who opened the account earlier at a lower rate are at a disadvantage.
3. Premature closure of SCSS account attracts some penalty. Click on the below link for details
3. Premature closure of SCSS account attracts some penalty. Click on the below link for details
SCSS Penalty
4. If you do not claim the quarterly interest paid on SCSS deposits, it won’t earn any extra interest.
4. If you do not claim the quarterly interest paid on SCSS deposits, it won’t earn any extra interest.
5. SCSS account can be opened only by senior citizens aged above 60 years. If you retire early, you can’t avail the benefit of this scheme.
5. SCSS account can be opened only by senior citizens aged above 60 years. If you retire early, you can’t avail the benefit of this scheme.
6. SCSS tenure is fixed for 5 years, which can be extended for another 3 years. This may lead to cash crunch to some investors
6. SCSS tenure is fixed for 5 years, which can be extended for another 3 years. This may lead to cash crunch to some investors
However, despite limitations, SCSS is one of the best schemes for senior citizens for guaranteed returns.
However, despite limitations, SCSS is one of the best schemes for senior citizens for guaranteed returns.
Learn more