Senior Citizens Savings Scheme vs Bank FDs: Interest rates, tax benefits, and deposit limits compared
SCSS vs FDs: Senior citizens generally get a slightly better interest rate on bank fixed deposits (FDs) compared to other investors. Similarly, the government has special programs for them, like the Senior Citizens Savings Scheme (SCSS). Both FDs and SCSS have some common features, like a fixed period of time you have to keep the money invested. However, they also have some differences and unique benefits.
As per an ET report, here’s a comparison of the interest rates offered by the Senior Citizens Savings Scheme and the rates on 5-year fixed deposits for senior citizens, along with other important features to consider.
SCSS vs FDs: Eligibility
SCSS: You can open an SCSS account if you’re over 60 years old. Retired civilian employees between 55 and 60 can also open an SCSS account, but they must invest within one month of receiving their retirement benefits. Retired defense employees aged 50 to 60 have the same requirement: they need to invest within a month after getting their retirement benefits.
FDs: Senior citizen fixed deposits can be opened by anyone who is 60 years old or older.
SCSS vs FDs: Tax benefits
SCSS: Under Section 80C of the Indian Income Tax Act, 1961, you can claim a tax deduction of up to Rs 1.5 lakh over the five-year term of the Senior Citizens Savings Scheme.
FDs: Investors with tax-saving fixed deposits that have a term of five years or more are eligible for income tax deductions.
SCSS vs FDs: Interest rates
SCSS: The government reviews and changes the interest rates for the Senior Citizens Savings Scheme every three months. Currently, the rate is 8.2%.
FDs: Banks can change the rates at any time, so the exact rate you get depends on which bank you choose. Keep in mind that interest rates can differ based on whether you’re investing in a regular 5-year fixed deposit or a tax-saving fixed deposit.
| Bank Name | Interest Rates (p.a.) | Additional rates offered to Super Senior Citizen* (over and above to senior citizen rates) | ||||
| Highest slab | 1-year tenure (%) | 3-year tenure (%) | 5-year tenure (%) | |||
| % | Tenure | |||||
| SMALL FINANCE BANKS | ||||||
| AU Small Finance Bank | 8.50 | 18 months | 7.00 | 8.00 | 7.75 | — |
| Equitas Small Finance Bank | 9.00 | 444 days | 8.70 | 8.50 | 7.75 | — |
| ESAF Small Finance Bank | 8.75 | 2 years to less than 3 years | 6.50 | 7.25 | 6.75 | — |
| Jana Small Finance Bank | 9.00 | 365 days | 9.00 | 7.75 | 7.75 | — |
| NorthEast Small Finance Bank | 9.25 | 555 days; 1111 days | 8.50 | 8.75 | 7.00 | — |
| Suryoday Small Finance Bank | 9.10 | Above 2 years to 3 years | 7.35 | 9.10 | 8.75 | — |
| Ujjivan Small Finance Bank | 9.00 | 15 months | 8.75 | 7.70 | 7.70 | — |
| Unity Small Finance Bank | 9.50 | 1001 days | 8.35 | 8.65 | 8.65 | — |
| Utkarsh Small Finance Bank | 9.10 | 2 years to 3 years | 8.60 | 9.10 | 8.35 | — |
| PRIVATE SECTOR BANKS | ||||||
| Axis Bank | 7.85 | 17 months to less than 18 months | 7.20 | 7.60 | 7.75 | — |
| Bandhan Bank | 8.35 | 1 year | 8.35 | 7.75 | 6.60 | — |
| City Union Bank | 7.50 | 400 days | 7.00 | 6.75 | 6.50 | — |
| CSB Bank | 7.75 | 401 days | 5.50 | 6.25 | 6.25 | — |
| DBS Bank | 8.00 | 376 days to 540 days | 7.50 | 7.00 | 7.00 | — |
| DCB Bank | 8.60 | 25 months to 26 months | 7.65 | 8.10 | 7.90 | — |
| Federal Bank | 7.90 | 400 days | 7.30 | 7.50 | 7.25 | — |
| HDFC Bank | 7.75 | 5 years 1 day to 10 years & 18 months to less than 21 months | 7.10 | 7.50 | 7.50 | — |
| ICICI Bank | 7.75 | 15 months to 2 years | 7.20 | 7.50 | 7.50 | — |
| IDFC First Bank | 8.50 | 500 days | 7.00 | 7.75 | 7.50 | — |
| IndusInd Bank | 8.25 | 1 year to 2 years | 8.25 | 7.75 | 7.75 | — |
| Jammu & Kashmir Bank | 7.55 | 1 year to less than 2 years | 7.55 | 7.00 | 7.00 | — |
| Karur Vysya Bank | 8.00 | 444 days | 7.40 | 7.40 | 7.40 | — |
| Kotak Mahindra Bank | 7.90 | 390 days to less than 23 months | 7.60 | 7.60 | 6.70 | — |
| Nainital Bank | 7.55 | 400 days – Naini Plus 2023 Deposit Scheme | 7.20 | 6.75 | 6.25 | 0.10% on all tenures |
| RBL Bank | 8.50 | 18 months to 2 years | 8.00 | 8.00 | 7.60 | 0.25% on all tenures |
| SBM Bank India | 8.75 | 3 years 2 days | 7.60 | 8.10 | 8.25 | — |
| South Indian Bank | 7.90 | 400 Days | 7.20 | 7.20 | 6.50 | — |
| Tamilnad Mercantile Bank | 8.00 | 400 days | 7.50 | 7.00 | 7.00 | — |
| YES Bank | 8.25 | 18 month to less than 2 years | 7.75 | 8.00 | 8.00 | — |
| PUBLIC SECTOR BANKS | ||||||
| Bank of Baroda | 7.75 | Above 2 years to 3 years | 7.35 | 7.75 | 7.15 | — |
| Bank of India | 7.75 | 2 years | 7.30 | 7.25 | 6.75 | 0.15% on tenures of 180 days to 10 years |
| Bank of Maharashtra | 7.00 | 1 year | 7.00 | 6.25 | 6.25 | — |
| Canara Bank | 7.75 | 444 days | 7.35 | 7.30 | 7.20 | 0.10% on 444 days |
| Central Bank of India | 7.75 | 555 days | 7.25 | 7.00 | 6.75 | — |
| Indian Bank | 7.75 | 400 days – IND SUPER | 6.60 | 6.75 | 6.75 | 0.25% on all tenures |
| Indian Overseas Bank | 7.80 | 444 days | 7.40 | 7.00 | 7.00 | 0.25% on all tenures |
| Punjab National Bank | 7.75 | 400 days | 7.25 | 7.50 | 7.00 | 0.30% for tenures up to 5 years |
| Punjab & Sind Bank | 7.75 | 444 days | 6.70 | 6.50 | 6.50 | 0.15% on tenure of 444 days |
| State Bank of India | 7.60 | 400 days – Amrit Kalash | 7.30 | 7.25 | 7.50 | — |
| Union Bank of India | 7.75 | 399 days | 7.25 | 7.00 | 7.00 | 0.25% on all tenures |
| FOREIGN BANKS | ||||||
| Deutsche Bank | 8.00 | Above 1 year to 3 years | 7.00 | 8.00 | 7.50 | — |
| HSBC Bank | 7.75 | 732 days to less than 3 years | 4.50 | 7.50 | 6.50 | — |
| Standard Chartered Bank | 8.00 | 2 years to less than 3 years | 7.65 | 7.60 | 7.25 | — |
| Note: *Depositors aged 80 years and above | ||||||
| Source: Paisabazaar.com as cited by ET |
SCSS vs FDs: Deposit limits
SCSS: You can deposit up to Rs 30 lakh in the Senior Citizens’ Saving Scheme.
FDs: There’s no limit on how much you can invest in fixed deposits. However, interest rates can vary based on whether you choose a regular 5-year FD or a tax-saving FD (which has a limit of Rs 1.5 lakh), and on whether the total investment is below or above Rs 2 crore.
SCSS vs FDs: Tax Deduction at Source (TDS)
TDS applies to the SCSS and fixed deposits if your annual interest income is over Rs 50,000. However, if your interest income is below Rs 50,000 in a financial year and you submit Form 15G/15H to the post office or bank, TDS won’t be deducted.
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