According to an ET report, here is 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.
SCSS vs FD: Eligibility
SCSS: You can open a SCSS account if you are above 60 years of age. Retired civilian employees between 55 and 60 years of age can also open a SCSS account, but they must invest within a month of receiving their retirement benefits. Retired defense employees in the age group of 50 to 60 years also have the same requirement: They have to invest within a month of receiving retirement benefits.
FD: Senior Citizen Fixed Deposit can be opened by any person of 60 years of age or above.
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SCSS vs FD: 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 period of the Senior Citizens Savings Scheme.
FD: Investors with tax-saving fixed deposits whose tenure is five years or more are eligible for income tax deduction.
SCSS vs FD: Interest Rates
SCSS: The government reviews and changes the interest rates of the Senior Citizens Savings Scheme every three months. At present this rate is 8.2 percent.
FD: Banks can change rates at any time, so the exact rate you get depends on which bank you choose. Keep in mind that interest rates may vary depending on whether you are investing in a regular 5-year fixed deposit or a tax-saving fixed deposit.
| Name of bank | Interest Rates (per annum) | Additional rates offered to very senior citizens* (higher than senior citizen rates) | ||||
| highest slab | 1 year tenure (%) | Tenure of 3 years (%) | Tenure of 5 years (%) | |||
| , | Tenure | |||||
| small finance bank | ||||||
| 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 and 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 and 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 – Nanny 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 months 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 tenure from 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 tenure up to 5 years |
| Punjab and Sindh 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 bank | ||||||
| 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 | ||||||
Read this also Short-term fixed deposits: Earn FD rates up to 8.75%; Top banks with highest interest rates for tenure less than 1 year
SCSS vs FD: Deposit Limit
SCSS: You can deposit up to Rs 30 lakh in the Senior Citizens Savings Scheme.
FD: There is no limit on how much you can invest in fixed deposits. However, interest rates may vary depending on whether you choose a regular 5-year FD or a tax-saving FD (which has a limit of Rs 1.5 lakh), and whether the total investment is less or more than Rs 2 crore.
SCSS vs FD: Tax Deducted at Source (TDS)
TDS is applicable on SCSS and fixed deposits if your annual interest income exceeds Rs 50,000. However, if your interest income is less than Rs 50,000 in a financial year and you submit Form 15G/15H at the post office or bank, TDS will not be deducted.
