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Business News/ Money / Personal Finance/  Senior citizen 5-year fixed deposit (FD) rates of SBI, HDFC Bank, ICICI Bank, PNB vs SCSS: What should elderly prefer?
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Senior citizen 5-year fixed deposit (FD) rates of SBI, HDFC Bank, ICICI Bank, PNB vs SCSS: What should elderly prefer?

The elderly prefer bank-fixed deposits or post office schemes for savings. The Senior Citizen Savings Scheme (SCSS) is popular, offering a guaranteed interest rate of 8.2% for 5 years

Senior Citizen Savings Scheme vs Bank FD: Senior citizens can invest up to ₹30 lakh in SCSS. (Pixabay)Premium
Senior Citizen Savings Scheme vs Bank FD: Senior citizens can invest up to 30 lakh in SCSS. (Pixabay)

When it comes to savings, the elderly prefer to park their money in either a bank fixed deposit or a post office small savings scheme. Senior Citizen Savings Scheme (SCSS), one of the nine small savings schemes offered by the post office, is also quite popular with the older generation. Any individual above the age of 60 can invest in senior citizens bank fixed deposit or SCSS.

SCSS latest interest rates, tenure

The maturity period for the SCSS scheme is five years. It can be extended for another 3 years. At present SCSS is offering a guaranteed interest rate of 8.2 per cent. These rates are with effect from 1 January 2024. Once the investment is done the interest rate remains the same throughout the tenure. Senior citizens can invest up to 30 lakh in this scheme.

SBI senior citizen FD latest rates

State Bank of India (SBI), the country's largest lender, offers an interest rate between 4% to 7.50%  for tenure ranging from 7 days to 10 years. On a 5-year tenure, SBI offers 7.25% to senior citizens. These rates were last revised on 27 December 2023.

Punjab National Bank (PNB) senior citizen FD latest rates

Punjab National Bank offers an interest rate between 4% to 7.75% for 7 days to 10 years for senior citizens. The bank offers 7% for senior citizens on deposits maturing in five years. These rates were last revised on 8 January 2024.

HDFC Bank senior citizen FD latest rates

HDFC Bank offers an interest rate between 4% to 7.75% for senior citizens. On a 5-year tenure, HDFC Bank offers 7.50%. These rates were last revised on 1 October 2023.

ICICI Bank senior citizen FD latest rates

ICICI Bank offers an interest rate between 3.50% to 7.65%. The bank offers 7.50% on 5-year tenure. These rates were last revised on 16 October 2023.

SCSS vs Bank FDs: Which offers the best rate?

If we talk about bank FDs, senior citizens get an additional rate of interest that can go up to 0.50% more than for the general public. While SCSS gives 8.2%, SBI, and PNB give 7.25%, and 7% respectively. HDFC, and ICICI Bank offer 7.5% to senior citizens on deposits maturing in five years.

Taxation on SCSS

Investments in SCSS, and five-year bank FD qualify for tax deduction under Section 80C. Currently, the SCSS deposit limit is 30 lakh. If you invest this amount, the quarterly interest will be 61,500, and the annual interest will be 2,46,000 (at 8.2% interest). Since this amount is above the 50,000 limit, TDS will be deducted at a specified rate.

According to Section 80TTB of the Income Tax Act, senior citizens can avail of a deduction of up to 50,000 on the interest on deposits, which includes fixed deposits.

 

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ABOUT THE AUTHOR
Sangeeta Ojha
A business media enthusiast. Writes on personal finance, business and banking.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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Published: 23 Jan 2024, 01:42 PM IST
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