Five drawbacks of investing in SCSS: The Senior Citizen Savings Scheme (SCSS) is a government-sponsored savings scheme for seniors in India. Any individual over the age of 60 can invest in this scheme and get higher interest rates than bank fixed deposits (FD). Investing in SCSS has some advantages, but seniors should also be aware of the disadvantages before investing in this scheme.
Five drawbacks of investing in SCSS: The Senior Citizen Savings Scheme (SCSS) is a government-sponsored savings scheme for seniors in India. Any individual over the age of 60 can invest in this scheme and get higher interest rates than bank fixed deposits (FD). Investing in SCSS has some advantages, but seniors should also be aware of the disadvantages before investing in this scheme.
Latest Interest Rates for Senior Citizen Savings Scheme (SCSS)
Banks and post offices offer an interest rate of 8.2% on the Senior Citizens Savings Scheme (SCSS). The government has raised interest rates for the April-June quarter from 8% to 8.2%. Once the investment is completed, the interest rate remains the same for the holding period.
Latest Interest Rates for Senior Citizen Savings Scheme (SCSS)
Banks and post offices offer an interest rate of 8.2% on the Senior Citizens Savings Scheme (SCSS). The government has raised interest rates for the April-June quarter from 8% to 8.2%. Once the investment is completed, the interest rate remains the same for the holding period.
Senior Citizen Savings Scheme (SCSS) Investment Limit
Seniors can invest up to ¥300,000 rupees under this scheme from 1st April, ¥$15 million ago, as Finance Minister Nirmala Sitharaman said in her 2023 budget presentation.
Senior Citizen Savings Scheme (SCSS) Investment Limit
Seniors can invest up to ¥300,000 rupees under this scheme from 1st April, ¥$15 million ago, as Finance Minister Nirmala Sitharaman said in her 2023 budget presentation.
The Senior Savings Scheme (SCSS) offers a variety of benefits for seniors looking for a safe investment option, but there are also some limitations that you should be aware of before investing.
The Senior Savings Scheme (SCSS) offers a variety of benefits for seniors looking for a safe investment option, but there are also some limitations that you should be aware of before investing.
1) TDS of SCSS Interest
If the interest accrued on the SCSS account exceeds the limit ¥50,000 in the fiscal year, it is subject to TDS.
1) TDS of SCSS Interest
If the interest accrued on the SCSS account exceeds the limit ¥50,000 in the fiscal year, it is subject to TDS.
“Interest on SCSS deposits becomes taxable once it exceeds the cap. ¥50,000 caps in a fiscal year, unlike the PPF scheme where everything is tax-free,” said Vinit Khandare, CEO and founder of MyFundBazaar.
“Interest on SCSS deposits becomes taxable once it exceeds the cap. ¥50,000 caps in a fiscal year, unlike the PPF scheme where everything is tax-free,” said Vinit Khandare, CEO and founder of MyFundBazaar.
Account holders can avoid TDS by submitting Form 15G/15H if accrued interest does not exceed the cap. ¥According to Archit Gupta, founder and CEO of Clear, there is a limit of 50,000.
Account holders can avoid TDS by submitting Form 15G/15H if accrued interest does not exceed the cap. ¥According to Archit Gupta, founder and CEO of Clear, there is a limit of 50,000.
Currently, the SCSS deposit limit is ¥300,000 rupees.Investing this amount, the quarterly interest is ¥61,500 and the annual interest rate is ¥2,46,000 (at an interest rate of 8.2%). This amount is ¥The 50,000 limit, TDS will be deducted at a specified rate, Gupta added.
Currently, the SCSS deposit limit is ¥300,000 rupees.Investing this amount, the quarterly interest is ¥61,500 and the annual interest rate is ¥2,46,000 (at an interest rate of 8.2%). This amount is ¥The 50,000 limit, TDS will be deducted at a specified rate, Gupta added.
2) Fixed interest rate
The current interest rate of 8.2% makes SCSS accounts a very attractive investment option for seniors, but individuals who previously opened accounts at lower interest rates are at a disadvantage. Close his previous SCSS account and possibly start a new one to take advantage of the current high rates. However, canceling your SCSS account prematurely will incur a fee.
2) Fixed interest rate
The current interest rate of 8.2% makes SCSS accounts a very attractive investment option for seniors, but individuals who previously opened accounts at lower interest rates are at a disadvantage. Close his previous SCSS account and possibly start a new one to take advantage of the current high rates. However, canceling your SCSS account prematurely will incur a fee.
3) No Interest on Unclaimed Interest Income
On a quarterly basis, SCSS account holders are required to report interest income. If you do not claim interest paid quarterly, you will not receive any further interest on that money.
3) No Interest on Unclaimed Interest Income
On a quarterly basis, SCSS account holders are required to report interest income. If you do not claim interest paid quarterly, you will not receive any further interest on that money.
4) Restricted age group
Archit Gupta said only seniors over the age of 60 can open SCSS accounts, and private sector employees who want to retire early cannot benefit from the scheme.
4) Restricted age group
Archit Gupta said only seniors over the age of 60 can open SCSS accounts, and private sector employees who want to retire early cannot benefit from the scheme.
5) Fixed tenure
There is a 5-year lock-in period for investing in SCSS, with penalties for early withdrawal.
5) Fixed tenure
There is a 5-year lock-in period for investing in SCSS, with penalties for early withdrawal.
Investments in SCSS accounts have a 5-year lock-in period. A further three-year extension is possible. Some depositors may find it difficult to plan based on their goals and may only want to invest for a few years due to the lock-in period. Due to the lock-in period and certain penalties for premature withdrawal, certain investors could potentially experience a liquidity crisis, Vinit Khandare said.
Investments in SCSS accounts have a 5-year lock-in period. A further three-year extension is possible. Some depositors may find it difficult to plan based on their goals and may only want to invest for a few years due to the lock-in period. Due to the lock-in period and certain penalties for premature withdrawal, certain investors could potentially experience a liquidity crisis, Vinit Khandare said.
Disclaimer: The views and recommendations above are those of the individual analyst and not those of Mint. Investors are advised to check with a certified professional before making any investment decision.
Disclaimer: The views and recommendations above are those of the individual analyst and not those of Mint. Investors are advised to check with a certified professional before making any investment decision.
