The Ministry of Finance has notified a sharp increase in the interest rate applicable to deposits under the Senior Citizens Welfare Fund (SCWF), setting it at 6.85 per cent per annum for the financial year 2025-26 — a more than doubling of the 3.35 per cent rate that was in force during the previous financial year 2024-25.
The notification, bearing File Number F. No. 13/20/2014-NS and issued by the Department of Economic Affairs under the Ministry of Finance from New Delhi on June 5, 2026, states that deposits made under the SCWF shall bear interest at 6.85 per cent — six point eight five per cent — with effect from April 1, 2025, remaining in force through March 31, 2026.
The interest rate history of the SCWF has seen sharp swings in recent years. The rate stood at 7.15 per cent for FY 2023-24, before being cut steeply to 3.35 per cent for FY 2024-25 — a reduction of 3.80 percentage points that had drawn attention for its likely impact on the scale of senior citizen welfare programmes funded through the corpus.
The reversal to 6.85 per cent for FY 2025-26 marks a significant recovery, though it remains marginally below the 7.15 per cent rate of 2023-24.
The SCWF was established by the Central Government in exercise of the powers conferred by Section 128 of the Finance Act, 2015, with the rules framed and notified vide G.S.R. 322(E) dated March 18, 2016, by the Ministry of Finance, Department of Economic Affairs.
The fund is built from unclaimed deposits lying dormant across a range of financial instruments. Specifically, unclaimed money lying under Small Savings Schemes, Employees Provident Fund, Public Provident Fund schemes, life and non-life insurance schemes or policies maintained by insurance companies, and accounts of Coal Mines Provident Fund is transferred into the SCWF.
Institutions are required to identify such unclaimed amounts on an annual basis and transfer them to the fund on or before March 1 each year, on a net basis — that is, unclaimed deposits minus claims accepted in accordance with the law for accounts whose balances have already been transferred.
The corpus so collected is then deployed for the promotion of welfare of senior citizens, in line with the National Policy on Older Persons and the National Policy on Senior Citizens.
