According to a Times of India news report, “The SCSS currently offers a risk-free return of 8% per annum with interest payable quarterly and has a five-year lock-in. However, the scheme allows for early withdrawal in case of an emergency. The SCSS account can be opened in a bank or post office, and many banks provide an online facility. While the scheme is for senior citizens above the age of 60, those who are above 55 but have retired from service are eligible to open an account. While some banks have now started offering up to 8% for senior citizens, these are mainly on annual return schemes. Also, most banks have limited the higher return to special deposits to special schemes of a fixed tenure.”
“While the return on the SCSS was hiked to 8% from 7.6% in January, the return on monthly income scheme has been increased to 7.1% from 6.7%. For women savers, the one-time new small savings scheme, Mahila Samman Savings Certificate, will be made available for a two-year period up to March 2025. It will offer deposit facility up to Rs 2 lakh in the name of women or girls for a tenor of 2 years at a fixed interest rate of 7.5% with a partial withdrawal option,” reports TOI.
“In our estimate, the impact of these are likely to be limited. Schemes such as 7.5% on Mahila Samman Savings Certificate would not impact much as some banks are already offering competitive rates on deposit of this tenor. However, we may see some shift of funds to the senior citizen saving scheme and monthly income account which would continue to put pressure on deposit accretion of banks,” said Prakash Agarwal, director, India Ratings and Research told TOI.The SCSS was established in 2004 to provide elderly persons with a secure alternative for considering other risky avenues. Finance Minister Nirmala Sitharaman, in her Budget 2023 speech, announced a small savings scheme for women. The FM said the Mahila Samman Savings Certificate would have a tenure of two years and would offer an interest rate of 7.5%.
(With inputs from Times of India)