Bank fixed deposits (FDs) and the Senior Citizen Savings Scheme (SCSS) offered by India Post are two of the most popular investment options for senior citizens. Many retirees struggle to make a choice between investing in SCSS or bank FD.
SCSS details
Senior Citizen Savings Scheme is backed by the Government of India, making it risk-free. The tenure of SCSS investment is 5 years (extendable for 3 more years). It qualifies for tax deduction under Section 80C (up to Rs 1.5 lakh investment). There is a maximum investment limit of Rs 30 lakh.
Bank FD details
Bank fixed deposits for senior citizens are covered under Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance up to Rs 5 lakh per depositor per bank. The tenure of FDs can vary between 7 days to 10 years. The 5-year bank FDs qualify for tax deduction under Section 80C (up to Rs 1.5 lakh investment) if booked under tax saving FD. There is no upper limit to invest in fixed deposits, however, interest rates may vary depending on retail or bulk deposit.Also read: Senior citizen FDs are offering up to 9.5%: Check the current fixed deposit interest rates after RBI cuts repo rate by 25 bps
Here’s a quick comparison of the interest rates on 5-year fixed deposits from top banks and the interest rate provided by India Post on SCSS to help you make an informed choice.
SCSS interest rate
The government has not raised the SCSS interest rate for the current quarter (January- March 2025). Account holders will receive an interest rate of 8.2%. The interest is payable every quarter and is fully taxable. Minimum deposit shall be Rs. 1000 and in multiple of 1000, subject to maximum limit up to Rs. 30 lakh in all SCSS accounts opened by an individual.
SBI senior citizen FD
As per the State Bank of India (SBI) website, the bank offers 7.50% on 5 year FDs and up to 10 years for senior citizens.
Canara Bank FD rates
As per the Canara Bank website, the bank offers 7.20% for fixed deposits held for 5 years and up to 10 years for senior citizens.Punjab National Bank FD rates
As per the PNB website, the bank offers a 7% interest rate on 5 year FDs and up to 10 years for senior citizens.
HDFC Bank FD rates
As per the HDFC Bank website, the bank offers a 7.50% FD interest rate on 5 year FDs and up to 10 years for senior citizens.
ICICI Bank FD rates
As per the ICICI Bank website, the bank offers a 7.50% interest rate on fixed deposits held for 5 years and up to 10 years for senior citizens.
Axis Bank senior citizen FD
As per the Axis Bank website, the bank offers a 7.75% FD interest rate for 5 years and up to 10 years for senior citizens.
Also read: Axis Bank makes FD investment easier: Check how to invest in Axis Bank fixed deposits from any other bank
Other banks FD interest rate
Yes Bank offers a tax-saving fixed deposit with an interest rate of 8.00% for senior citizens.
DCB Bank provides a tax-saving FD at an interest rate of 7.90%.
Dhanlaxmi Bank and IndusInd Bank provides a tax-saving fixed deposit scheme at 7.75% interest for eligible investors.
While SCSS provides only a quarterly interest payout at the rate of 8.2% per annum, FD interest is either cumulative (paid at maturity) or periodic (monthly/quarterly/half-yearly/yearly depending on the bank’s terms). However, it should be noted that there is hardly any bank (except small finance banks) that give higher interest rates on fixed deposits than 8.2%. Investors must decide which of these options is better on the basis of their financial goals.
