Senior Citizen Savings Scheme vs FDs: Which offers highest interest rate?
Fixed deposit rates are typically 25–50 basis points (bps) higher for senior citizens than for other depositors. Interest rates vary with each bank, tenure and amount. Senior citizens’ savings schemes interest rates are revised by the government every quarter.Senior Citizens’ Savings Scheme (SCSS) are backed by government and fixed deposit up o Rs 5 lakh are insured under Deposit Insurance and Credit Guarantee Corporation (DICGC).
If you're a senior citizen looking to make an investment here is a comparison of the interest rates offered by SCSS and major banks like SBI, HDFC Bank, ICICI Bank, PNB, Axis, and Yes Bank for FDs with a 5-year term.
SCSS interest rate
In response to the rising interest rates, the government revised the interest rates of a select few small savings programs, notably the Senior Citizens Savings Scheme, for the quarter ending in June 2023. The SCSS interest rate, which was raised from 8.0% to 8.2%. The minimum investment threshold is set at Rs 1,000, and the maximum investment is Rs 30lakh. Note that the interest rate will remain the same for the duration of the investment once it is completed.
You Might Also Like:
Senior citizens can earn up to 9% interest rate on this bank FDs
It has a five-year term that can be extended by three years at maturity. The account holder can extend the account for another three years from the date of maturity by submitting the necessary documents to the relevant post office together with the passbook. Section 80C of the Income Tax Act of 1961 applies to investments made under this plan.
Interest
"Interest is taxable if total interest in all SCSS accounts exceeds Rs.50,000/- in a financial year, and TDS at the prescribed rate shall be deducted from the total interest paid," according to the Post Office website. If form 15 G/15H is presented and the accrued interest does not exceed the prescribed amount, no TDS will be deducted."
SBI senior citizen FD
State Bank of India offers interest rate up to 7.50% on fixed deposit tenure 2 years to less than 3 years. On ”SBI We-care” deposit scheme, the tenure ranges from 5 years to 10 years, the interest rate offered is 7.50%.
HDFC Bank senior citizen FD
HDFC Bank offers interest rate up to 7.75% on fixed deposit tenure 5 Years 1 day to 10 Years on Senior Citizen Care FD. The bank also offers highest interest rate of 7.75% on tenure of 4 Year 7 Months - 55 months.
ICICI Bank senior citizen FD
ICICI Bank offers interest rates up to 7.60% on fixed deposit tenure 5 Years 1 day to 10 Years on ICICI Bank Golden Years FD. The bank offers interest rate of 7.50% on tenure 5 years 1 day to 10 years.
However, one should consider taxation and amount of investment before deciding.
Axis Bank senior citizen FD rates
Axis Bank offers interest rate between 7.75% to 8.00% in tenures between 18 months to 5 years for senior citizens.
Yes Bank senior citizen FD rates
Yes Bank offers interest rates between 7.75% to 8.25% for tenure ranging from 15 months to 5 years. The highest interest rate of 8.25% is offered on 18 Month to less than 36 Months and 7.75% is earned on tenure of 36 months to less than 120 months.
Don’t miss out on ET Prime stories! Get your daily dose of business updates on WhatsApp. click here!
This story originally appeared on: India Times - Author:Faqs of Insurances
