The Central government is likely to revise the interest rate on the Senior Citizen Savings Scheme (SCSS) as the next revision of the interest rates on Small Savings Schemes is due by the end of this month. The senior citizens are also hopeful that the government may announce an increase in the SCSS interest rate along with the revised interest rate for Small Savings Schemes.
The SCSS interest rate for the final quarter of financial year 2022-23 was announced in December. Currently, SCSS offers an interest rate of 8%. The senior citizens are expecting a hike in interest rate as the same has gone upto 9.3% in the past.
Though the government is yet to make any official announcement in this regard, the experts are not optimistic about any change in the SCSS interest rate. It is doubtful that the SCSS interest rate will increase any further, according to Amit Gupta, MD of SAG Infotech. Similarly, Vineet Khandare, CEO and Founder of MyFundBazaar India Private Limited, said that SCSS interest rate cannot be revised further.
On account of the rise in government bond yield, the Centre is expected to raise the interest rate on short-term small savings plans.
To protect the financial interests of elderly citizens in view of the high inflation rates, it seems necessary to increase the SCSS rates. Though an official announcement is yet to be made on the interest rate, the government could soon release the notification on enhanced limits under the SCSS. In the Union Budget 2023, Finance Minister Nirmala Sitharaman had increased the limit under SCSS from Rs 15 lakh to Rs 30 lakh.
Senior citizens can earn up to Rs 20,000 per month in interest income by investing Rs 30 lakh in their SCSS accounts as per the existing interest rate. The SCSS account provides elderly citizens a guaranteed rate of interest of 8% interest. The maturity period for SCSS plan is 5 years and the savings can be increased for another three years after maturity.
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