Senior Citizens Savings Scheme vs fixed deposits: Which investment scheme is best for senior citizens?


New Delhi: If you’re above 60 years of age and planning to invest your hard-earned savings in a secure investment instrument, then you can consider putting your money in either the Senior Citizens Savings Scheme or fixed deposits. 

India Post had launched the Senior Citizens Savings Scheme for elderly investors in the year 2004. The scheme is also operated via Public Sector Banks (PSBs) that are also managing the PPF Scheme across the nook and cranny of the country. 

In the Senior Citizens Savings Scheme, a state-backed retirement investment option, senior citizens can invest a lump sum amount and reap interest, tax claims and other benefits. 

On the other hand, anyone can invest in fixed deposit (FD) schemes offered by both public and private sector banks. However, all the banks in India offer a better interest rate to senior citizens as compared to the interest rate offered to investors under 60. 

Senior Citizens Savings Scheme vs fixed deposits: Interest rate comparison 

Investors can avail a 7.4% interest rate on an annual basis on their investments in the Senior Citizens Savings Scheme. The rate is effective for the period from July 1, 2021, to September 30, 2021.

On the other hand, senior citizens can avail a maximum annual interest rate of 6.75% on their fixed deposit investments. 

Senior Citizens Savings Scheme vs fixed deposits: Minimum investment 

Senior citizens can open their FD account by investing a minimum of about Rs 1000 in certain banks such as the State Bank of India (SBI). However, at other banks, investors will need to invest a minimum of Rs 5000 to open their FD accounts. 

In comparison, one can open an account with the Senior Citizens Savings Scheme by investing a minimum of Rs 1,000. Investors can invest up to Rs 15 lakh in multiples of Rs 1000 in the elderly investment scheme. 

Senior Citizens Savings Scheme vs fixed deposits: Maturity period

Fixed deposit investments come with a maturity period ranging from seven days to a few decades. However, the Senior Citizens Savings Scheme matures in five years, with an option to extend the policy for another three years. Also Read: Gold Price Today, 27 August 2021: Gold trading cheaper by Rs 8800 from record levels, should you invest now?

Senior Citizens Savings Scheme vs fixed deposits: Tax benefits 

Investors can claim a maximum of Rs 1.5 lakh per annum as tax returns from investments in fixed deposits and the Senior Citizens Savings Scheme under section 80C of the Income Tax Act. Also Read: WhatsApp’s new feature may let users listen to voice messages before sharing

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