Ahead of Budget, the State Bank of India (SBI ) in a report said that Small savings schemes like the Senior Citizen Savings Scheme (SCSS) and Sukanya Samriddhi Yojana (SSY) will continue to receive a major push from the government. In case of SSY, the government can give a hard push through encouraging fresh registrations in a mission drive mode, allowing one time registrations for all leftover cases up to 12 years, it said.
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SCSS and SSY are small savings schemes which are widely popular among investors. While SCSS is available for an individual of 60 years or above, the later caters to girl child. A legal guardian/natural guardian can open SSY in the name of a girl child. An account can be opened up to the age of 10 years only from the date of birth.
The government has recently announced a hike in small savings interest rates by up to 1.1 percentage points for the January-March quarter. However, the same was done for SCSS but not for Sukanya Samriddhi Account (SSA). Currently, SCSS offers an interest rate of 8 percent, while SSA offers 7.6 percent.
These investments are highly sought by individuals but they have long lock-in periods. Many times, one's expenditure grows and he/she is unable to invest in such schemes, thus defeating the purpose of those benefits. Moreover, investment in schemes such as SSY puts added burden as money is not available when required. So, experts wants government to focus on this too in Budget 2023.
The maturity period of SCSS is five years. After maturity, the account can be extended for further three years within one year of the maturity by giving application in a prescribed format. SSA can be closed after completion of 21 years.
Customers are allowed to set up a Sukanya Samriddhi account at a minimum investment of Rs 250 and a maximum of Rs 1,50,000 a financial year. The subsequent deposits in the account can be made in multiples of Rs 50. However, there is no limit on the number of deposits either in a month or in a financial year. Deposits may be made in the account till the completion of a period of fifteen years from the date of opening of the account.
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