Senior Citizens Savings Scheme vs Bank FDs: Interest rates, tax benefits, and deposit limits compared | Business

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.
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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 NameInterest Rates (p.a.)Additional rates offered to Super Senior Citizen* (over and above to senior citizen rates)
Highest slab1-year tenure (%)3-year tenure (%)5-year tenure (%)
AU Small Finance Bank8.5018 months7.008.007.75
Equitas Small Finance Bank9.00444 days8.708.507.75
ESAF Small Finance Bank8.752 years to less than 3 years6.507.256.75
Jana Small Finance Bank9.00365 days9.007.757.75
NorthEast Small Finance Bank9.25555 days; 1111 days8.508.757.00
Suryoday Small Finance Bank9.10Above 2 years to 3 years7.359.108.75
Ujjivan Small Finance Bank9.0015 months8.757.707.70
Unity Small Finance Bank9.501001 days8.358.658.65
Utkarsh Small Finance Bank9.102 years to 3 years8.609.108.35
Axis Bank7.8517 months to less than 18 months7.207.607.75
Bandhan Bank8.351 year8.357.756.60
City Union Bank7.50400 days7.006.756.50
CSB Bank7.75401 days5.506.256.25
DBS Bank8.00376 days to 540 days7.507.007.00
DCB Bank8.6025 months to 26 months7.658.107.90
Federal Bank7.90400 days7.307.507.25
HDFC Bank7.755 years 1 day to 10 years & 18 months to less than 21 months7.107.507.50
ICICI Bank7.7515 months to 2 years7.207.507.50
IDFC First Bank8.50500 days7.007.757.50
IndusInd Bank8.251 year to 2 years8.257.757.75
Jammu & Kashmir Bank7.551 year to less than 2 years7.557.007.00
Karur Vysya Bank8.00444 days7.407.407.40
Kotak Mahindra Bank7.90390 days to less than 23 months7.607.606.70
Nainital Bank7.55400 days – Naini Plus 2023 Deposit Scheme7.206.756.250.10% on all tenures
RBL Bank8.5018 months to 2 years8.008.007.600.25% on all tenures
SBM Bank India8.753 years 2 days7.608.108.25
South Indian Bank7.90400 Days7.207.206.50
Tamilnad Mercantile Bank8.00400 days7.507.007.00
YES Bank8.2518 month to less than 2 years7.758.008.00
Bank of Baroda7.75Above 2 years to 3 years7.357.757.15
Bank of India7.752 years7.307.256.750.15% on tenures of 180 days to 10 years
Bank of Maharashtra7.001 year7.006.256.25
Canara Bank7.75444 days7.357.307.200.10% on 444 days
Central Bank of India7.75555 days7.257.006.75
Indian Bank7.75400 days – IND SUPER6.606.756.750.25% on all tenures
Indian Overseas Bank7.80444 days7.407.007.000.25% on all tenures
Punjab National Bank7.75400 days7.257.507.000.30% for tenures up to 5 years
Punjab & Sind Bank7.75444 days6.706.506.500.15% on tenure of 444 days
State Bank of India7.60400 days – Amrit Kalash7.307.257.50
Union Bank of India7.75399 days7. on all tenures
Deutsche Bank8.00Above 1 year to 3 years7.008.007.50
HSBC Bank7.75732 days to less than 3 years4.507.506.50
Standard Chartered Bank8.002 years to less than 3 years7.657.607.25
Note: *Depositors aged 80 years and above
Source: as cited by ET

ALSO READ | Short-term fixed deposits: Earn FD rates up to 8.75%; top banks for highest interest rates for less than 1 year tenure

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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