A FD (Fixed Deposit) is a safe and secure investment where banks offer a fixed interest rate for a predetermined tenure. Senior Citizens Savings Scheme (SCSS) is a scheme backed by the government providing higher interest rates with quarterly payouts, designed for retirees. Both options ensure capital safety but differ in returns and liquidity. If you invest Rs 7,50,000, your earnings will vary significantly under SBI’s 5-year FD and SCSS. Let’s compare their interest rates, quarterly income and overall maturity benefits.
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SBI FD interest rates
- Interest Rate for general public: 3.50%-7.25% p.a.
- Interest Rate for senior citizens: 4.00%-7.75% p.a.
- SBI Tax Saving FD: 6.50% (for general public) & 7.50% (for senior citizens)
- NRIs can invest in NRO, NRE, RFC and FCNR (B) FDs in multiple currencies.
Maturity amount on SBI 5-year FD for Rs 7,50,000
- Deposited Amount: Rs 7,50,000
- Total Interest Earned: Rs 2,85,315
- Maturity Value: Rs 10,35,315
Senior Citizens Savings Scheme (SCSS) – Interest Rates
Current Rate (from Jan 1, 2024): 8.2% p.a.
Interest Payable: Quarterly (April 1, July 1, Oct 1, Jan 1).
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Eligibility criteria for SCSS
- Individuals aged 60+ years.
- Retired Civilian Employees (55-60 years) (Investment within 1 month of retirement).
- Retired Defense Employees (50-60 years) (Investment within 1 month of retirement).
- Joint Account: Allowed only with a spouse.
SCSS deposit limits & tax benefits
- Minimum Deposit: Rs 1,000
- Maximum Deposit: Rs 30,00,000
- SCSS Tax Benefit: Qualifies for Section 80C deduction.
Quarterly income from SCSS on Rs 7,50,000 investment
- Maturity Amount: Rs 10,57,500
- Quarterly Interest: Rs 15,375
- Total Interest Earned in 5 Years: Rs 3,07,500
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SCSS premature withdrawal rules
- Before 1 year: No interest, amount recovered.
- 1-2 years: 1.5% penalty on principal.
- 2-5 years: 1% penalty on principal.
SCSS account closure & extension
- After 5 years: Can be closed with withdrawal application.
- Account Extension: Possible for 3 more years (must apply within 1 year of maturity).
Taxation on Senior Citizens Savings Scheme interest
- SCSS TDS Deduction: If total interest exceeds Rs 50,000/year.
- Form 15G/15H: Required for exemption if within limits.
(Disclaimer: Don’t consider this as an investment advice. Do your own due diligence or consult an expert for financial planning)
