SCSS vs PSU Bank Senior Citizen FD: When we turn 60 years old and become senior citizens, our expenses may remain the same, be cut, or increase, but in all cases, we need a substantial amount for our daily expenses. There may also be chances that you may not have any earning source at that age. You may depend on your family members for your expenses, an annuity plan, rental income, or returns from your investments.
A lot of senior citizens seeking a fixed income invest in Post Office Senior Citizen Scheme (SCSS), or senior citizen bank fixed deposit schemes (FD), also offered by all PSU banks.
In SCSS, one may get a quarterly payout after investing a lump sum amount.
On the other hand, in bank FDs, investors get a return on the maturity date of the scheme, but if they want, they may also opt for quarterly, half-yearly, or yearly withdrawals.
But which of them provides a higher interest rate- Post office SCSS or senior citizen FDs from banks such as State Bank of India (SBI), Punjab National Bank (PNB), Canara Bank, Bank of Baroda (BoB), or Indian Overseas Bank (IOB). Let’s check the latest interest rate from SCSS and PSU bank FDs and know which of them is offering the highest quarterly payout on an Rs 10,00,000, Rs 20,00,000 and Rs 30,00,000 investments.
Senior Citizen Post Office Scheme interest rate
The scheme provides the joint highest interest rate among all post office schemes at 8.2 per cent.
A senior citizen of 60 years old can open an individual or a joint account with their spouse with a minimum deposit of Rs 1,000. The maximum deposit is Rs 30 lakh.
After the amount is deposited, the scheme provides a quarterly payout to its account holders.
Investment under the SCSS scheme qualifies for tax benefits under Section 80C of the Income Tax Act, 1961, in the old tax regime.
If an SCSS account holder closes the account prematurely or after a maximum limit of 5 years, they can take unlimited extensions of 3 years each.
When they close the account, the post office returns the principal amount.
Senior citizen bank FDs
Banks provide 25 bps-50 bps extra return to senior citizens on FD deposits compared to what they offer to general citizens.
If they invest in a 5-year tax saver FD, their deposit qualifies for tax benefits under Section 80C in the old tax regime.
FDs provide a return on their maturity, which can be from 7 days to 10 years, but they also offer quarterly, half-yearly, and yearly withdrawals.
Many senior citizens seeking a regular, fixed income from their investments invest in senior citizen FDs.
All FDs in India are compounded quarterly.
5-year senior citizen FD interest rates in PSU banks
Here, we are providing you the interest rates from 5 PSU banks from their respective official websites.
Quarterly payout on Rs 10 lakh, Rs 20 lakh, and Rs 30 lakh investments
(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.)