Savings scheme

Senior savings plan: here’s how to calculate your returns

Calculation of SCSS Fixed Income Securities

The interest rate provided for under the Senior Savings Plan is adjusted quarterly. The interest rate announced at the time of investment remains unchanged for the duration of the maturity period and is not affected by changes in the coming quarter. For example, Mr. A deposited Rs 1 lakh in SCSS on December 2020 and recently in March 2021 the government kept the interest rate unchanged i.e. 7.4% for the three months following ending June 30, 2021. Therefore, your deposit will earn the same amount. interest rate throughout the 5-year maturity period even if it is revised in the last quarter.

Calculation of early withdrawal and SCSS account closure

Calculation of early withdrawal and SCSS account closure

One year after opening the account, a person can withdraw money from their SCSS account. One year after opening the account, a person can withdraw money from their Senior Savings Plan account. If the account is closed within one year, no interest will be paid and all interest paid will be deducted from the principal. If the account is closed after one year but within two years from the date of opening, 1.5 percent of the principal will be deducted. If the account is closed after two years but within five years from the date of opening, 1% of the principal will be withheld as a penalty. For example: Mr. A opened a SCSS account on February 1, 2018 and deposited Rs 1 lakh. But unfortunately, he closed the account on January 6, 2020, then he will be charged a penalty of Rs 1,500.

Calculation of quarterly disbursements

Calculation of quarterly disbursements

The Senior Citizen Savings Scheme offers a quarterly payment option for account holders. Which means that the account holders will receive the interest payment on a quarterly basis. For example: Mr. A deposits Rs 5 lakh then he will get a quarterly payment of Rs 9,250.

Rs {(5,000,000 x 7.4% x 5) / 20} = Rs 9,250.

As a result, Mr. A will receive approximately Rs. 9,250 as interest over a period of 20 quarters.


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