One of India’s most alluring savings programs for seniors is the Senior Citizen Savings Scheme (SCSS). The program’s popularity is largely due to the fact that it is backed by the government and offers an interest rate that is higher than that of the majority of bank fixed deposit programs. A retired individual (over the age of 60) may contribute a lump sum to the program either alone or with another person. The SCSS will provide access to regular income after retirement in addition to tax benefits. Currently, the scheme offers an interest rate of 8.2%. The maximum deposit allowed by the scheme is Rs 30 lakh, with a minimum deposit of ₹1000. During the Union Budget of 2023, a proposal to increase the SCSS limit from ₹15 lahks to ₹30 lakhs was made.

Long-term savings options with attractive features and unrivaled security include SCSS. There are a few advantages of SCSS, Tax advantages are given, Investment in the scheme is secure, Early withdrawal is permitted, The account can be moved throughout the nation as well as There are high-interest rate offers. But, there are many drawbacks included in the mentioned scheme.

• Only seniors over the age of 60 are eligible for the SCSS program. The program is not available to private sector employees who want to retire early.
• Owners of SCSS accounts are required to report their interest income every quarter. If you fail to claim the interest that is owed each quarter, you won’t be able to earn any more interest on the money.
• In contrast to PPF schemes, where everything is tax-free, SCSS interest becomes taxable if it exceeds the ₹50,000 cap in a financial year.
• Despite the current interest rate of 8.2%, which makes the SCSS account an appealing investment option for senior citizens, those who opened the account earlier at a lower rate are at a disadvantage. They might be forced to do this in order to take advantage of the current high rate, forcing them to close their old SCSS account and open a new one. An SCSS account can be prematurely canceled, but there are costs involved.
• An investment’s lock-in period is five years for SCSS accounts. It may be prolonged for an additional three years. Some investors may experience a liquidity crisis as a result of the lock-in period and the penalty for early withdrawal.