Double benefits announced under the Senior Citizens Saving Scheme (SCSS)

in The Budget 2023

The deposit limit under the senior citizens saving scheme (SCSS) is announced to be doubled in the
budget of 2023 by finance minister Nirmala Sitharaman. It is increased from 15 lakhs to 30 lakhs.
New schemes for women were also announced by her in the budget announcement session.
The finance minister also suggested that the maximum deposit bar for the Monthly income account
scheme will be increased from 4.5 lakhs to 9 lakhs for an account with a single holding and also from
9 lakhs to 15 lakhs for an account with joint holders.
What is the Senior Citizens Saving Scheme (SCSS)?
Anyone over the age of 60 may create a Senior Citizens Saving Scheme (SCSS) account at a nearby
bank or post office. However, a person who has retired on superannuation and is older than 55 but
younger than 60 can register an SCSS account.
Previously, this modest savings programme supported by the Indian government had a deposit cap
of 15 lakh rupees and offered interest at a risk-free rate of 7.40 per cent annually. The 7.40% annual
interest rate offered by the SCSS is significantly greater than the typical yields offered by bank fixed
deposits.
SCSS interest is paid out quarterly. This means on March 31st, June 30th, September 30th, and
December 31st of each fiscal year. In contrast, the Senior Citizens Saving Scheme has a five-year
lock-in period. However, in the event of a financial emergency, early withdrawal is permissible.
The Senior Citizens Saving Scheme matures after five years. A depositor, on the other hand, has the
option of extending the maturity period by three years. To extend a Senior Citizens Saving Scheme
account, the depositor must complete and return an application form within one year of the
maturity date.
A depositor can invest in the Senior Citizens Saving Scheme with a single upfront deposit. Cash
deposits are permitted for amounts less than one lakh, but check deposits of one lakh or more are
permissible, with the deposit date beginning with the cheque's realisation date.
After one year of account establishment, pre-mature withdrawals are permitted under the Senior
Citizens Saving Scheme. If a depositor withdraws after one year but before two years, a 1.5 per cent
penalty is imposed on the principal amount put in the SCSS account. However, if the SCSS account is
more than two years old, the pre-mature withdrawal costs will be 1% of the net deposited amount
at the time of account establishment.