It's A Very Good 8.2% Interest On Deposits From This Govt Scheme

Investors are on the look-out for deposits where interest rates are at the highest. Most investors want to lock-in money at higher interest rates, before a fall in interest rates. Several schemes have seen interest rates rise and here is a good government scheme for senior citizens.

Senior Citizen Savings Scheme with 8.2% interest

Currently, the Senior Citizen Savings Scheme offers an attractive interest rate of 8.2%. This is way better than what large government owned banks are offering and is a must invest for senior citizens. In fact, the government in the Union Budget 2023-24 has raised the amount of investment permitted by Senior Citizens in this savings scheme from Rs 15 lakhs to Rs 30 lakhs. This is a great boon for investors who are looking at a fixed source of income. Also, most banks are offering deposits for senior citizens at interest rates around 8%, which makes the Senior Citizen Savings Scheme.

Under it, interest rates are offered to investors every quarter on 31st March, 30th June, 30th Sept and 31st December. This means that investors who are looking to get regular income for sustenance can use the opportunity to invest. If one invests the full amount of Rs 30 lakhs one can get income of more than Rs 60,000 every quarter. Individuals above the age of 60 can apply. However, for civilians who are 55 and above can also apply provided they invest the proceeds of their retirement benefits with 1-month of receiving the same.

Please note the Senior Citizen Savings Scheme runs for a period of 5-years and if you withdraw the scheme early, there is a charge that is levied on the same. So, make sure you invest for a period of 5-years.

Also, in the present context the interest rates are reasonable and hence locking-in money for 5-years at 8 per cent proposition is not a bad idea. The scheme is also very safe given that it i backed by the Government.

Taxation on the Senior Citizen Savings Scheme

Interest is taxable if total interest in all Senior Citizen Savings Scheme accounts exceeds Rs.50,000 in a financial year. However, if individuals submit their form 15g and 15h there is no tax that is applicable. If the Senior Citizen Savings Scheme is closed after 1 year but before 2 years from the date of opening, an amount equal to 1.5 per cent will be deducted from principal amount.