Union Finance Minister Nirmala Sitharaman in her Budget speech on Wednesday announced to increase the deposit limit for the senior citizens savings scheme (SCSS) from Rs 15 lakh to Rs 30 lakh.

The budget announcement comes after the government in January increased the interest rates for SCSS deposits from 7.6 per cent to 8 per cent.

The government has also increased the deposit limit for Monthly Income Account Scheme from Rs 4.5 lakh to Rs 9 lakh for single account and from Rs 9 lakh to Rs 15 lakh for joint account.

What Is A Senior Citizen Savings Scheme?

The government-backed SCSS scheme offers senior citizens regular income post their retirement. In January, the interest rates were increased from 7.6 per cent to 8 per cent.

It was the second successive quarterly hike after the increase in the third quarter, which was the first hike after a pause for nine consecutive quarters.

Besides SCSS, the government has also revised rates for other small savings schemes, such as the Post Office Monthly Income Scheme, National Savings Certificate (NSC), etc.

Eligibility & Other Details

Eligible persons can open the SCSS account individually or jointly with spouses. However, the first account holder of the joint account will be the contact person for all official purposes.

Anyone above 60 years can open the account. But those who have taken voluntary retirement (VRS) can also apply if they are above 55. For retired defence personnel, the minimum age limit is over 50 years. However, they must open the account, within a month of receipt of their retirement benefits.

The minimum investment is Rs 1,000, but the government has now increased the maximum limit from Rs 15 lakh to Rs 30 as lump sum. The rest of the rules, like the lock-in, remain the same. It has a five-year lock-in, but it can be extended once for three years.

The interest income is earned quarterly from the date of deposit to March 31, June 30, September 30, and December 31. However, during the extension period, interest will be applicable from the date of maturity at the then rate. Also, the account holder will not receive any additional interest

if the person claims the interest amount late. The principal amount is paid back to the holder at the end of the tenure.