There are too many schemes for senior citizens. But what is better for you, where a senior citizen should invest his money for better profit? In this article, we will discuss about two schemes – Senior Citizen Savings Scheme and Senior Citizen Fixed Deposit.
After retirement, when there’s no source of regular income, the biggest question facing older investors is where to invest their money to ensure both security and a good return. In such a situation, two options—the Senior Citizens Savings Scheme (SCSS) and Senior Citizen Fixed Deposit (FD)—are the most popular. Both are considered safe options, but where can seniors invest their money and what are the differences between them? Learn more here.
What is SCSS?
The Senior Citizens Savings Scheme (SCSS) is a government scheme specifically designed for individuals over 60. Its tenure is 5 years, extendable by another 3 years. It currently offers an interest rate of 8.2% per annum, which is higher than most bank fixed deposit rates. The maximum investment limit is ₹30 lakh, and interest is credited to the account every three months. This scheme is guaranteed by the Government of India, making it considered very safe. Investing in SCSS is eligible for a tax deduction of up to ₹1.5 lakh under Section 80C of the Income Tax Act. However, the interest earned is taxable.
Know know about the benefits of FD
Senior citizen FDs are a good option for those who need a flexible tenure. Bank FDs can range from a few months to 10 years.
Many banks offer extra interest rates to senior citizens.
Federal Bank: 7.20% on 999-day FD
HDFC, ICICI and Kotak Bank: Around 7.10%
SBI: 6.95% on 2–3 year FDs
PNB : 7.10% for 390 days
Canara Bank: 7% on 444 days
Union Bank: 6.60% on 3 years
Conclusion
Both investments are safe, but SCSS is government-guaranteed, while FDs offer insurance (DICGC) up to ₹5 lakh. This means SCSS is slightly safer. The interest earned on both is taxable, but SCSS also offers tax benefits under Section 80C. The same exemption applies to 5-year tax-saving FDs.