Senior Citizens Savings Scheme: Everyone becomes very aware of their savings after retirement. His entire life’s savings is not something he wants to put into any venture where there is a chance of losing money. This is because, on general, investors who are 60 years of age or older are risk averse and do not want to take on financial risks.
Because of this, older citizens frequently choose the Senior Citizens Savings Scheme (SCSS), which is a part of the Post Office Small Savings Scheme. Since it’s a post office scheme, security is guaranteed 100 percent. The scheme has gained more appeal due to the increase in the maximum deposit limit and the interest generated on it.
SCSS Maximum Deposit Limit Reaches Rs 30 Lakh
The Senior Citizens Savings Scheme (SCSS) now has a maximum deposit limit of Rs 30 lakh. This cap was formerly set at Rs 15 lakh. This year’s budget included an announcement to raise this cap. On the other hand, effective of April 1, 2023, the interest rate for this government programme is now 8.02 percent annually.
For the quarter ending in March, this interest rate is fixed. This government plan allows investments of at least Rs 1000. The Singh account has a maximum limit of Rs 30 lakh. Under Section 80C of the Income Tax Act, investors in SCSS are eligible for tax exemption on contributions up to Rs 1.50 lakh.
Computation on two distinct accounts
- Maximum deposit: Rs 60 lakh
- Interest rate: 8.02 percent per annum
- Maturity period: 5 years
- Monthly interest: Rs 40,100
- Quarterly interest: Rs 1,20,300
- Annual interest: Rs 4,81,200
- Total interest in 5 years: 24,06,000
- Total Return: Rs 84,06,000 lakh (60,00,000 + 24,06,000)
Computation with a single account
- Maximum deposit: Rs 30 lakh
- Interest rate: 8.02 percent per annum
- Maturity period: 5 years
- Monthly interest: Rs 20,050
- Quarterly interest: Rs 60,150
- Annual interest: Rs 2,40,600
- Total interest in 5 years: Rs 12,03,000
- Total Return: Rs 42,03,000 lakh (30,00,000 + 12,03,000)
SCSS Welcomes Joint Accounts for Couples
The Senior Citizens Savings Scheme allows you to register a joint account if you are a husband and wife. Additionally, a husband and wife may open two different accounts. A maximum of Rs 60 lakh (or Rs 30 lakh in a single account) may be deposited in two separate accounts under such circumstances.
When the account matures in five years, you can extend it for an additional three years. You can open this account if you are over 60 years old, a retired defence personnel whose age is at least 60 years old, or retired employees in the 55–60 age range who have chosen to participate in the Voluntary Retirement Scheme (VRS).
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