The Buyt Desk
Senior Citizen Saving Scheme and Post Office Monthly Income Scheme have seen a big change in the Union Budget of 2023. The investment ceiling for both schemes has been increased by double. These two schemes will now help investors to park larger sums of money than before and pave the way to earn regular income.
Senior Citizens’ Saving Scheme (SCSS)
Senior Citizens’ Saving Scheme (SCSS) maximum deposit level has been doubled and increased from Rs 15 lakh to Rs 30 lakh. The minimum deposit for this scheme is the same i.e. Rs 1,000. For the quarter ending March 31, 2023, the government has increased the interest rate on the scheme to 8%. It is used to invest the retirement benefits and earn monthly interest from the investment as regular income.
Earlier, the maximum deposit limit for the senior saving scheme was Rs 15 lakh. The interest rate provided on this risk-free scheme was 7.40% per year.
Most retired people become conservative investors after their retirement. The rise in the maximum savings and investment limit of Rs 30 lakh at the given interest rate would result in decent earnings through interest income. With this move, the government has promised a guaranteed higher return to senior citizens. Thus, the doubling of the ceiling provides senior citizens an opportunity to keep their funds in a 100% safe investment with a better interest rate.
The tenure of the scheme is 5 years. However, an individual can look for an extension of another 3 years, taking the complete investment tenure to 8 years. Since premature withdrawal is permitted, investors can withdraw some money in an emergency.
Post Office Monthly Income Scheme (MIS)
The maximum deposit limit for Monthly Income Scheme has been raised from Rs 4.5 lakh to Rs 9 lakh for a single account and Rs 9 lakh to Rs 15 lakh for a joint account. The investment ceiling in the post office’s monthly income schemes was not reviewed since 1987. The monthly income scheme is a 5-year deposit scheme that is presently providing an interest rate of 7.1% as announced for the Jan-Feb March quarter. Though the government reviews and fixes the interest rate for small savings schemes every quarter and thus it is subject to change.
Both schemes are used to earn a monthly income in the form of interest. They are low-risk and guaranteed return schemes. The biggest advantage is that they come with a government guarantee and thus investors feel safe in such schemes.
