This Article is From Apr 02, 2020

Senior Citizen Savings Scheme (SCSS) No Longer Pays 8.6% Interest Rate

Senior Citizen Savings Scheme: From April 1, the government has lowered the interest rates applicable to most small savings schemes by up to 140 basis points (1.4 percentage point).

Senior Citizen Savings Scheme (SCSS) No Longer Pays 8.6% Interest Rate

Senior Citizen Savings Scheme Interest Rate: The return has been reduced to of 7.4% from 8.6%

From the beginning of this month, investment in the Senior Citizen Savings Scheme (SCSS) - one of the nine government-run small savings schemes - fetches a lower return of 7.4 per cent, compared to 8.6 per cent in the quarter ended March 31. The SCSS scheme, which pays interest at the end of each of the four quarters, allows investment to the tune of Rs 1,000 to Rs 15 lakh for a maturity period of five years, according to India Post's website - indiapost.gov.in. For the first quarter of financial year 2020-21, the government has lowered interest rates on most small savings schemes such as the SCSS by 80-140 basis points (0.8-1.4 percentage point), according to an official statement. 

While the interest rate for Senior Citizen Savings Scheme has been reduced to 7.4 per cent, here are the interest rates applicable to other small savings schemes:

InstrumentInterest Rate In January-MarchInterest Rate In April-JuneCompounding Frequency
Savings Deposit4%4%Annually
One-Year Time Deposit6.9%5.5%Quarterly
Two-Year Time Deposit6.9%5.5%Quarterly
Three-Year Time Deposit6.9%5.5%Quarterly
Five-Year Time Deposit7.7%6.7%Quarterly
Five-Year Recurring Deposit7.2%5.8%Quarterly
Monthly Income Account7.6%6.6%Monthly and paid
National Savings Certificate7.9%6.8%Annually
Public Provident Fund7.9%7.1%Annually
Kisan Vikas Patra7.9% (matures in 113 months)6.9% (matures in 124 months)Annually
Sukanya Samriddhi Account8.4%7.6%Annually
(Source: dea.gov.in)

Currently, the Ministry of Finance offers nine types of small saving schemes, including the 15-Year Public Provident Fund (PPF) and Sukanya Samriddhi scheme, and revises the interest rates applicable to them on a quarterly basis.