Recently on 7 November 2023, changes made in SCSS scheme . Please guide me 1) what is penalty on premature payment after one year of deposit ? 2) whether new changes are also applicable to deposit kept prior to 7 November 2023.Thanks

Ans: Understanding the New SCSS Premature Withdrawal Penalty
That's a great question! Let's break down the recent changes to the Senior Citizen Savings Scheme (SCSS) and how they impact your situation.

1. Penalty on Premature Withdrawal After One Year:

If you withdraw your money from the SCSS after one year but before completing two years, a penalty of 1.5% will be deducted from the principal amount you deposited. This means you'll receive your deposit minus 1.5% as a penalty.

2. Applicability of New Changes:

The good news is that the new SCSS rules apply only to accounts opened on or after November 7, 2023. So, if you deposited your money before that date, the old withdrawal rules will still apply to your account.

Here's a quick summary:

Deposits before Nov 7, 2023: Old rules apply (interest reversal for withdrawal before 1 year)
Deposits on or after Nov 7, 2023: New rules apply (1.5% penalty for withdrawal after 1 year but before 2 years)
Remember: These are just the penalty details. It's always wise to consider the potential loss of interest you might incur by withdrawing your money prematurely.

I hope this clarifies the new SCSS rules!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in