Senior Citizen Saving Scheme Vs Bank FD: Most banks offer slightly higher interest on FD to senior citizens as compared to other investors. The Central Government is offering Senior Citizen Saving Scheme (SCSS) to senior citizens keeping in mind their needs.
Senior Citizen Saving Scheme Vs Bank FD: Most banks offer slightly higher interest on FD to senior citizens as compared to other investors. The Central Government is offering Senior Citizen Saving Scheme (SCSS) to senior citizens keeping in mind their needs. Senior Citizens Savings Scheme (SCSS) is a government scheme. Bank FD is offered by all public, private and small saving banks. There are many similarities between Bank FD and SCSS, including the lock in period. There are some differences between the two and each plan has its own benefits.
Senior Citizen Saving Scheme and Bank FD
Senior citizens above 60 years of age can invest in Senior Citizen Saving Scheme (SCSS) and Senior Citizen Fixed Deposit (Senior Citizen FD). In Senior Citizen Saving Scheme, people above 60 years of age invest money together to get good returns. As is done in FD. This scheme is giving higher returns as compared to Senior Citizen FD.
Benefits of Senior Citizen Saving Scheme
This scheme is being run by the government. Your money remains safe in this. Investors also get tax exemption of up to Rs 1.5 lakh under Section 80C of the Income Tax Act 1961. The maturity period in this scheme is 5 years. You can extend it for next three years. Opening a SCSS account is quite easy. You can open an account by visiting any bank or post office across the country. Customers can transfer their SCSS account to any branch across the country. You can deposit a minimum of Rs 1,000 under the scheme. After this you can increase the amount in multiples of Rs 1,000. You can deposit up to Rs 30 lakh in a financial year.
Senior Citizen Bank FD
Compared to normal FD, senior citizens are given special interest in banks. Generally the bank gives 0.50 percent additional interest to elderly customers. You can get interest money every month, quarterly, half yearly or annually. Tax benefits are also available on some FDs. Its maturity period is 5 years or more. Many small finance banks are offering 9.50 percent interest to senior citizens.
What is the difference between the two?
Senior Citizen Saving Scheme is offering 8.2 percent interest annually. This scheme is covered under 80C. If you invest in FD for less than five years, you do not get any tax benefit. The second difference between the two is that there is a maximum investment limit under SCSS. Whereas there is no such limit in FD. Apart from this, FD comes with many options. Which of the two investment options you should choose depends on the financial goals of the investor and the amount of money he has.
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