Finance Ministry lowers Interest on Senior Citizens Welfare Fund

The Ministry of Finance issued Notification No. 13/20/2014-NS dated June 20, 2025, lowering the interest rate on deposits under the Senior Citizens Welfare Fund to 3.35 percent for the financial year 2024–25. This is applicable retrospectively from April 1, 2024 to March 31, 2025.

The SCWF was established in 2016 to channel unclaimed funds from financial institutions including insurance, employee provident funds, public savings, and other government-backed schemes into welfare programs aimed at supporting India’s ageing population. The interest accrued on these funds helps finance government initiatives for senior citizens.

The newly announced rate of 3.35 percent marks a decline from previous years and reflects broader trends in government-managed small savings and surplus fund returns. While the rate ensures that unclaimed balances earn nominal returns, it is also seen as a cautious fiscal move amid evolving macroeconomic conditions.

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According to the notification, the revised interest will apply to all eligible deposits maintained under the SCWF, in accordance with the original framework laid out in G.S.R. 322(E) dated March 18, 2016.

Senior citizens' welfare advocates have expressed concern that lower interest accruals may reduce the fund's capacity to support critical schemes. However, officials maintain that the reduction aligns with the general movement of interest rates across government-managed funds.

The Ministry of Finance has reiterated that the fund remains a vital instrument in social support for older adults and that all welfare disbursements will continue as per policy priorities. The notification is now in effect, and the 3.35 percent rate will remain applicable for the entirety of FY 2024–25, unless further amended by the government.

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