Bank FDs vs Senior Citizens Saving Scheme (SCSS): Latest Interest Rate, Income Tax Benefits, Term Period, Withdrawal Rules and Other Key details Compared
The interest rate offered on Senior Citizen Savings Scheme (SCSS) is 8 percent. As far as the interest rate on fixed deposits is concerned, here the rate varies from 3.5 percent to 8.5 percent
When it comes to liquidity, bank FDs outperform SCSS since they provide deposits with terms ranging from 7 to 10 years. However, the Senior Citizens Savings Program has a five-year maturity period, however one may request an extension for an additional three years, bringing the entire investing period to eight years.
Investors in the Senior Citizens Savings Plan are permitted to withdraw a portion of their funds in case of an emergency. All banks permit you to prematurely withdraw your savings; however, you will be penalised for doing so.
The SCSS interest is due every financial year on the following dates: March 31, June 30, September 30, and December 31. Since the interest rate is compounded every quarter or year and due at maturity along with the principle, there is no fixed interest payable over a quarter, half-year, or annually in a cumulative FD scheme.
Because the Senior Citizens Savings Plan has a five-year term, you are eligible for a Section 80C income tax deduction of up to 1.5 lakh rupees. Investors who hold bank FDs for five years or longer are eligible for income tax deductions.
The SCSS interest rate is evaluated every quarter and could vary at any time. The senior citizen savings plan gives the highest rate of return when compared to other savings plans on the market. On the other hand, the rate of interest for FDs is not evaluated every quarter.
There is no tax exemption on the money earned through the schemes. You will be charged as per the Income Tax slab rates.