Latest news with #SavingsScheme
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Business Standard
22-05-2025
- Business
- Business Standard
SCSS vs NSC vs Debt Funds: Which fixed-income option is the best in 2025?
When it comes to generating stable, tax-efficient returns, investors in India often find themselves torn between traditional savings instruments like the Senior Citizens' Savings Scheme (SCSS) and the National Savings Certificate (NSC), or newer, more market-linked options like debt mutual funds. With interest rates, tax rules, and inflation all evolving, how do these options compare today? More importantly, which one should you pick based on your needs? The Contenders: What are they? Fixed-rate small saving schemes vs debt mutual funds. Source: Value Research 1. SCSS (Senior Citizens' Savings Scheme) For: Individuals aged 60 and above Interest Rate (April–June 2025): 8.2% p.a. (paid quarterly) Tenure: 5 years (extendable by 3 years) Tax Benefits: Eligible for Section 80C deduction (up to Rs 1.5 lakh) Interest is taxable, but TDS is applicable if interest exceeds Rs 50,000/year Best for: Retirees seeking regular income with government guarantee 2. NSC (National Savings Certificate) For: Any Indian citizen Interest Rate (April–June 2025): 7.7% p.a. (compounded annually, paid at maturity) Tenure: 5 years Tax Benefits: Principal qualifies for Section 80C Interest is taxable, but reinvested interest (except final year) also qualifies for Section 80C Best for: Conservative investors with a 5-year horizon, who don't need regular income 3. Debt Mutual Funds For: Investors of all ages Returns: 6–8% on average, can be higher/lower depending on type Taxation (Post-2023 rules): Gains taxed at slab rate (no LTCG benefit) No Section 80C benefit Indexation benefit abolished for debt funds Best for: Investors seeking liquidity and diversification, with some risk tolerance Comparative Snapshot Which one should you choose? For Senior Citizens: Value Research recommends SCSS Why: It offers high assured returns and quarterly payouts, ideal for retirees needing regular income. Example: Mrs. Rani, 65, invests Rs 15 lakh in SCSS. She earns Rs 30,750 every quarter, providing her with predictable income while her capital remains safe. For Salaried Taxpayers Saving for 5 Years: Choose: NSC Why: If you want a fixed return and tax savings under 80C but don't need liquidity, NSC fits the bill. Example: Sanjay, 35, wants a tax-saving investment but already maxes out EPF and PPF. He invests ₹1.5 lakh in NSC. In 5 years, he gets back ₹2.2 lakh, earning steady compounded returns without taking any market risk. For Working Professionals with Moderate Risk Appetite: Choose: Debt Mutual Funds Why: If you value liquidity and want to diversify with dynamic returns, debt funds (like low duration, short-term, or corporate bond funds) are suitable. Example: Priya, 40, keeps ₹5 lakh in a corporate bond fund yielding 7.2%. She holds it for 2 years and exits without penalty when she needs the money for her child's school admission. Caution: Tax rules have changed Post-April 2023, debt funds lost their long-term capital gains (LTCG) tax benefit and indexation advantage. Now, all gains — even after 3 years — are taxed as per slab rate. This reduces their edge over traditional instruments, especially for those in the highest tax bracket (30%). Tip: Tax-aware investors in higher brackets should lean toward SCSS or NSC unless they need liquidity. There's no one-size-fits-all answer. Your life stage, income needs, tax bracket, and risk appetite should drive the decision. As per Value Research:
![[UPDATED] Simpan SSPN declares 4.05pct dividend, highest in a decade](/_next/image?url=https%3A%2F%2Fassets.nst.com.my%2Fimages%2Farticles%2FSSPN300425_1745995073.jpg&w=3840&q=100)
![[UPDATED] Simpan SSPN declares 4.05pct dividend, highest in a decade](/_next/image?url=https%3A%2F%2Fassets.nst.com.my%2Fassets%2FNST-Logo%402x.png%3Fid%3Db37a17055cb1ffea01f5&w=48&q=75){kind=small}
New Straits Times
30-04-2025
- Business
- New Straits Times
[UPDATED] Simpan SSPN declares 4.05pct dividend, highest in a decade
PUTRAJAYA: The National Higher Education Fund Corporation (PTPTN) has declared a 4.05 per cent dividend for the National Education Savings Scheme (Simpan SSPN) for 2024, the scheme's highest return in 10 years. The announcement was made today by Higher Education Minister Datuk Seri Dr Zambry Abd Kadir. The total dividend distribution amounts to RM439.87 million, benefiting 6.77 million Simpan SSPN depositors. This marks an increase from RM357.65 million, which was the amount for the 3.60 per cent dividend in the previous year. This latest payout brings the cumulative dividend disbursed since the scheme's inception in 2004 to RM12.12 billion. Also present were Deputy Minister Datuk Mustapha Sakmud, PTPTN chairman Datuk Seri Norliza Abdul Rahim and chief executive officer Ahmad Dasuki Abdul Majid.
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Business Standard
25-04-2025
- Business
- Business Standard
Explained: Can you break your SCSS deposit early, and what would it cost?
The Senior Citizen Savings Scheme (SCSS) has become one of the go-to investment options for senior citizens in India, offering a stable and secure way to grow their savings. With its high interest rates, government backing, and quarterly payouts, it's no wonder that SCSS is favored by retirees looking for predictable returns. However, life is unpredictable, and sometimes, unforeseen financial needs arise that require you to access your funds earlier than planned. So, what happens if you need to break your SCSS deposit early? Is it possible, and what are the consequences? What is the SCSS scheme? The Senior Citizen Savings Scheme (SCSS) is a government-backed savings scheme designed to provide a regular income stream for senior citizens. It offers a fixed interest rate and allows for both individual and joint accounts, primarily benefiting those 60 years and older. The scheme is a safe investment option, backed by the Indian government, and offers tax benefits. The Senior Citizen Savings Scheme was introduced in 2004 as a part of post office savings scheme, to provide financial security to senior citizens who are in need of a steady income post retirement. Residents aged more than 60 years, can individually or jointly open SCSS account. It can either be opened in a post office branch or an authorized bank. It offers an interest rate of 8.2% for the current quarter. This scheme supports a maximum deposit of Rs.30 lakhs, with a tenure of 5 years which can be further extended to 3 years. Deductions under section 80C of Income Tax Act is allowed for this scheme. However, interest on deposits are fully taxable. The current interest rate applicable to SCSS is 8.2% p.a. This interest rate is applicable for first quarter of financial year 2025-26. At 8.2% p.a. interest rate and an investment amount of Rs.30 lakh, the monthly income is stated to be Rs.20,500 per month for each investor. The maturity period of SCSS is 5 years. However, individuals can extend the maturity period for 3 more years by submitting an application. The application for an extension of maturity should be within one year from the date of maturity. Withdrawals from Senior Citizens Savings Scheme accounts will be exempt from tax starting August 29, 2024. Senior citizens are predominantly benefitted from this amendment. TDS (Tax Deducted at Source) is applicable on the interest earned if it exceeds ₹50,000 in a financial year (for senior citizens). Investments up to Rs 1.5 lakh in SCSS qualify for tax deductions under Section 80C of the Income Tax Act. Premature withdrawal before maturity: Yes, but with a cost SCSS has a default lock-in period of five years. However, the government does allow early closure—with penalties based on how long you've been invested. Value Research breaks this down: If withdrawn before 1 year: No interest is payable. Any interest already credited will be recovered from your principal. If withdrawn after 1 year but before 2 years: A penalty of 1.5 per cent of the deposit amount is deducted. If withdrawn after 2 years but before 5 years: A penalty of 1 per cent of the deposit amount is deducted ClearTax does a further deep dive: Within 1 Year of Deposit: If you wish to withdraw the SCSS deposit before the first year, the interest earned will be penalized. A penalty of 1.5% will be charged on the deposit amount, which means you will lose some interest earned on the deposit. After 1 Year but Before 2 Years: If the deposit is withdrawn after one year but before two years, the penalty reduces to 1%. After 2 Years: If you withdraw the deposit after two years but before the completion of the full five-year tenure, the penalty continues to be 1% of the deposit amount. It's important to note that if you break your SCSS account before maturity, you won't get the full interest rate and could face some loss of earnings. Conditions: One exception to the premature withdrawal penalty is in the unfortunate event of the account holder's death. If the account holder passes away, the SCSS deposit can be withdrawn without incurring any penalty on the interest. In this case, the nominee or legal heir will be entitled to the principal and the interest earned, without the penalty charges that would normally apply to premature withdrawals. Tax Implications of Premature Withdrawal When you break your SCSS deposit early, the tax treatment on the interest earned remains the same. Interest earned on SCSS is subject to taxation, and the amount is taxed according to your income tax bracket. However, the early withdrawal may affect how much you ultimately pay in taxes due to the reduced interest earnings after the penalty is applied. Additionally, Tax Deducted at Source (TDS) will be applicable if the interest earned exceeds ₹50,000 in a financial year (for senior citizens). The TDS will be deducted regardless of whether the deposit is withdrawn prematurely or not. What about maturity? You now have more flexibility "Previously, SCSS allowed only a one-time extension of three years. But rules have changed. Now, you can extend your SCSS deposit indefinitely in blocks of three years each. This is great news for retirees who don't want to reinvest elsewhere and prefer to continue earning a fixed return in a secure scheme. The extension must be requested within one year of maturity. The interest rate applicable will be the one prevailing at the time of extension," explained Value Research in a note. Can You Withdraw During the Extension Period of SCSS? Yes, you can withdraw from your SCSS account during the extension period. After the initial 5-year term, the SCSS account can be extended for an additional 3 years. The best part? Once you have completed one year of this extended block, there is no penalty for premature withdrawal. This offers senior citizens more flexibility, as they can still access their funds without being penalized. Why is This Advantageous? This is a key benefit of the SCSS extension feature. If your circumstances change or if an unexpected financial need arises, you don't have to be permanently locked into the scheme. The ability to withdraw funds after a year during the extension period means that, while you continue to earn interest, you are not stuck if you need liquidity. This flexibility makes SCSS a relatively adaptable investment for seniors who may need to adjust their financial plans over time. How to Exit the SCSS Scheme (During or After Extension Period) To exit the scheme, whether during the original five-year term or during an extended period, you need to follow a simple process: Visit the Bank or Post Office: Go to the bank or post office where you hold your SCSS account. Submit Form 2: Fill out and submit Form 2, which is the form used for premature closure of your SCSS account. Provide Necessary Documentation: You may also need to submit some documents, such as your account details, proof of identity, and any other documents required by the institution. Once your request is processed, you will receive the principal amount and the interest earned, minus any penalties if applicable (which is not the case during the extension period after one year). This flexibility provides senior citizens with peace of mind, knowing that their funds are not entirely locked in if they need them earlier than planned.
Arabian Business
27-02-2025
- Business
- Arabian Business
UAE Savings Scheme offers workers alternative end of service benefits and investment opportunities
The UAE's ' Savings Scheme ' is an alternative end of service benefit service that can help boost a worker's post-retirement savings plans. The Ministry of Human Resources and Emiratisation (MoHRE) has conducted six workshops in the past two weeks to enhance awareness of the benefits offered by the 'Savings Scheme'. The voluntary alternative end-of-service benefits system for private sector workers can help residents and citizens save for a more secure financial future. UAE Savings Scheme The MOHRE workshops have gone further towards explaining the mechanisms for registering in the system through savings funds approved by MoHRE and the Securities and Commodities Authority (SCA). Approximately 500 employers and representatives from various companies participated in the workshops, which MoHRE organised in collaboration with accredited savings funds, including Lunate Capital, First Abu Dhabi Bank, Daman Investments, and National Bonds Corporation. These financial institutions, with their strong reputation and extensive experience in managing investment funds, ensure the effective implementation of the Savings Scheme, providing reliable financial benefits and improving the financial well-being of employees. The Savings Scheme seeks to invest the funds allocated for employees' end-of-service gratuity and grow their savings through leading, accredited investment funds. This promotes financial sustainability for private sector employees, enabling them to plan ahead with greater stability while facilitating business operations. The workshops provided a detailed explanation of the mechanisms and benefits of subscribing to the Savings Scheme, highlighting key aspects such as the advantages offered by accredited investment funds. The workshops also reviewed various investment options, including the: Capital Guarantee Portfolio Risk-Based Investment Options Shari'a-Compliant Fund Each portfolio and its corresponding investment options were explained in detail to accommodate the diverse needs of different segments of employees. UAE companies wishing to participate in the Savings Scheme can choose one of the accredited investment funds and pay the subscription for the workers they wish to register in the Scheme, with the possibility of retaining their dues for the period preceding subscription. The worker also has the right to make optional additional contributions to enhance and grow their savings and investment returns, which can be up to 25 percent of their total salary within the voluntary subscription framework. Furthermore, the worker is entitled to withdraw part or all of the amounts or investment returns, in accordance with the terms and conditions of the scheme. When a worker transitions from their current employer to a new one, they may either withdraw the accrued amount from the fund contributed by the current employer or choose to keep it in the fund to continue investing, with the option to access it at any time. The new employer in the UAE may assume responsibility for the previous employer's contributions to the same fund after establishing a contract with the fund. Alternatively, the new employer may register the worker with a different fund manager and cover the associated contribution fees. The Savings Scheme also provides skilled workers the freedom to choose from any of the available investment options based on their preferences, while unskilled workers can only be enrolled in the Capital Guarantee Portfolio. The Scheme allows optional participation for additional categories based on their interest in benefiting from its advantages. These include independent business owners, holders of freelance work permits, non-citizen employees working in government entities and affiliated establishments, as well as Emirati employees in both the public and private sectors. The individuals can register in the UAE Savings Scheme by making additional voluntary contributions, enabling them to save, invest, and grow their savings in a secure manner. This participation is contingent upon the continued payment of subscriptions by employers on behalf of UAE nationals in pension and social security systems. The Ministry of Human Resources and Emiratisation provides comprehensive, regularly updated information on accredited investment funds on its website, along with details about the voluntary alternative end-of-service benefits system, the 'Savings Scheme,' for private sector workers. Ahmed Al Yassi, Acting Assistant Under-Secretary for Labour Protection at MoHRE, said: 'Organising these workshops aligns with the Ministry's comprehensive approach to fostering sustainable partnerships in the labour market to achieve government policy objectives and ministerial decisions, reinforcing the UAE's global leadership in labour market practices.' The Ministry has urged private sector companies to enrol in the Savings Scheme and take advantage of the benefits it offers to both employers and employees, including enhancing employee entitlements and job stability, reducing costs for employers, and strengthening the financial and investment sector in the UAE.
Gulf Insider
27-02-2025
- General
- Gulf Insider
UAE Mandates Remote Learning on Fridays in Ramadan 2025
The UAE will switch to remote learning for public schools on Fridays during Ramadan. To promote family unity and the spiritual significance of Ramadan, the Ministry of Education has dedicated Fridays during the Holy Month to activities that reinforce familial bonds, instil core Ramadan values, and advance students' key skills. Within this context and in anticipation of the Holy Month, the Ministry of Education has introduced the 'Ramadan with Family' initiative, under which the students in public schools will shift to a remote learning system on Fridays during Ramadan, allowing them to engage in activities from home alongside their parents in a supportive family and Ramadan atmosphere. This initiative aligns with the UAE leadership's vision to create an inspiring family and community environment during Ramadan, reinforcing the values of the holy month in young minds. It aims to support family cohesion, strengthen social harmony, and allow individuals to make the most of the spiritually enriching Ramadan atmosphere. The Ministry clarified that the initiative, which will be implemented from the first Friday of Ramadan, applies to all students except those scheduled for exams on Fridays, which will be conducted in-person as per their approved schedules. Additionally, while the initiative targets students, teaching staff will continue attending UAE schools on Fridays as usual during Ramadan. However, parents who prefer their children to attend school on Fridays will have the option to send them, provided they handle transportation to and from school. The teaching staff will supervise students and ensure the continuation of their regular school schedule. To support the transition, the Ministry has prepared a guidance manual for students and parents opting for remote learning on Fridays. This manual provides detailed instructions on how to make the most of Fridays in line with Ramadan's values. It also includes curriculum-based cultural and religious activities to support students in their educational and moral development. Also read: UAE Savings Scheme Offers Workers Alternative End of Service Benefits and Investment Opportunities
