New Delhi: Retirement planning is a very important decision for every person to keep the source of money coming after retirement. After retirement, it is very important to pay attention to savings and investment at the time to keep the money coming for your lifestyle. Bank Fixed Deposit (FD) and Senior Citizen Savings Scheme (SCSS) are the best options for this. Recently State Bank of India (SBI) announced the extension of SBI ‘WECARE’ term deposit scheme for senior citizens to senior citizens.
In this news, we are telling you the comparison between SBI ‘WECARE’ Senior Citizen Fixed Deposit Scheme and Senior Citizen Savings Scheme (SCSS) to help you choose better investment options.
“SBI vcare” deposit for senior citizens
State Bank of India (SBI) has extended its special term deposit scheme for senior citizens for the second time. In May, the bank announced the SBI ‘WECARE’ Senior Citizens Fixed Deposit Scheme for senior citizens, which became available in early September. However, it was later announced by SBI that the scheme would now be available by the end of March.
SBI has stated on its website that a special “SBI VCare” deposit for senior citizens offered in the Retail TD segment with an additional premium of 30bps (over the existing 50bps) to ‘Senior Citizen’ on their retail TD Will be paid for years and more ‘. Only the “SBI VCare” deposit scheme has been extended till 31 March 2021.
The bank currently offers 6.2% interest, which is lower than the government-backed pension scheme. Special FD scheme does not provide any additional tax benefit. One can invest in SBI VCare FD Scheme for minimum five years and maximum 10 years.
If one withdraws the FD prematurely under the scheme, he will get only 5.8% interest rate. Customers have till December 31 to invest in the SBI Wecare FD scheme. Only residents sixty years of age and above are eligible for the Senior Citizen Scheme.
Government schemes: Can start investing in 100 to 500 rupees, small savings will make big fund
Senior Citizen Savings Scheme (SCSS)
Investors above 60 years of age can deposit up to Rs 15 lakhs in their lifetime in Senior Citizen Savings Scheme to earn regular interest income. A senior citizen couple can invest up to Rs 30 lakh in this scheme. Its lock-in period is 5 years. Currently, the Senior Citizen Scheme offers 7.4% interest.
Under the Senior Citizen Savings Scheme, subscribers are allowed to withdraw prematurely, but the penalty is applicable as follows:
If the account is withdrawn before the expiry of 2 years from the date of opening of the account, 1.5 percent of the deposit amount is withheld as penalty. If the exit from the scheme from the date of account opening is more than 2 years and less than 5 years, then 1 percent of SCSS balance is deducted as penalty. Deposits under the SCSS scheme, on the other hand, are counted for tax benefits under Section 80C of the Income Tax Act.
