Senior Citizens Savings Scheme: Along with schemes like Public Provident Fund, National Savings Certificate, the rules of Senior Citizens Savings Scheme have also changed.
There are a total of 7 changes that investors of the scheme should be aware of. Recently, some changes have been made in the Senior Citizens Savings Scheme, a savings scheme known for retirement. The government had issued a notification on November 7, 2023. Under this, the rules of small savings schemes have been changed.
Along with small savings schemes like Public Provident Fund, National Savings Certificate, the rules of Senior Citizens Savings Scheme have also changed. There are a total of 7 changes that investors of the scheme should be aware of.
1. Period to apply for the scheme
When you get the retirement benefits, you can apply for this scheme within three months of receiving the receipt, earlier you used to get only 1 month’s time.
2. On investment of spouse of government employee
Now in this scheme, the rules have also been simplified on the investment of spouses of such employees who have died while on duty. Under the new rules, now the spouse of the deceased government employee can invest the amount of financial assistance in this scheme, this will be approved in case the employee dies while on the job after the age of 50 years. This benefit will be available to all those central and state government employees who are eligible to take retirement benefit or death compensation.
3. Meaning of retirement benefits
In this notification, retirement benefit has been defined as any payment received by a retired employee after retirement or superannuation. This could include provident fund outstanding, retirement or superannuation or death gratuity, value of pension, leave encashment, retirement-cum-withdrawal benefit under EPS or ex-gratia payment under VRS.
4. Deduction on premature withdrawal
Under the new rules, if the account is closed before the expiry of one year, one percent of the deposit will be deducted. Earlier, if the account was closed before the expiry of the first year, the interest received on the deposit was recovered, and the remaining money was given to the account holder.
5. Account Extension
Now account holders can extend their account any number of times in a block of three years. Earlier it could be extended only once. You have to apply for each extension. And whenever the application for extension is received, the extension will be considered from the date of maturity or from the end of the block of three years. In both these cases, you can apply for account extension within one year.
6. Interest rate after extension
If the account is extended after maturity of five years, the interest on the deposit will be the maturity date rate or the extended maturity rate. Earlier, if there was extension only once, the maturity rate was applied.
7. Maximum Deposit Amount
You cannot make more deposits than what is allowed in this scheme. Earlier, extension could be done only once, so the conditions on the investment amount after extension were not clear. It is now stated that the amount deposited at the time of opening the account will be paid on or after the maturity of five years or at the end of each block period of three years where the account was extended under paragraph 8 from the date of account opening. Provided that after closure of the existing account or accounts, the depositor may open new accounts by depositing money as per his requirement within the maximum deposit.
