Comparing interest rates: Senior Citizens' Savings Scheme vs. Bank fixed deposit
2 min read . Updated: 02 Apr 2023, 09:38 AM IST
Premium- Small savings schemes have their interest rates reviewed every three months and adjusted if required, as they are linked to the market.
The government has increased the interest rates on certain Post Office Small Savings Schemes, including the Senior Citizens Small Savings Scheme.
This follows the trend of banks gradually raising their deposit interest rates since May 2022, in line with the Reserve Bank of India's policy rates.
Small savings schemes have their interest rates reviewed every three months and adjusted if required, as they are linked to the market.
The government has recently revised the interest rates of some small savings plans in response to the increase in interest rates.
For the quarter of June 2023, the interest rate of the Senior Citizens Savings Scheme was increased from 8.0% to 8.2%, making it the highest interest rate offered by any small savings program at present.
Post Office website on taxation noted, “Interest is taxable if total interest in all SCSS accounts exceeds Rs.50,000/- in a financial year and TDS at the prescribed rate shall be deducted from the total interest paid. No TDS will be deducted if form 15 G/15H is submitted and accrued interest is not above prescribed limit."
The government made several changes to the Senior Citizens Savings Scheme (SCSS) in Budget 2023. Among these changes, the maximum investment limit was raised from ₹15 lakh to ₹30 lakh.
The SCSS has a fixed tenure of 5 years, and interest is paid out every quarter, with payment dates falling on 31st March, 30th June, 30th September, and 31st December. The interest rate on SCSS has also been increased from 8% to 8.2% for the April-June 2023 quarter, making it a more attractive investment option for senior citizens.
SBI senior citizen FD rates
The State Bank of India currently offers various interest rates on its fixed deposit schemes depending on the tenure of the deposit. For instance, on a fixed deposit tenure of 1 year to less than 2 years, the bank offers an interest rate of 7.3%. Meanwhile, a tenure of 2 years to less than 3 years comes with an interest rate of 7.5%.
HDFC Bank senior citizen FD rates
On fixed deposit tenures ranging from 18 months to 5 years, HDFC Bank offers an interest rate of 7.50%. Senior citizens can avail a higher interest rate of 7.60% on fixed deposit tenures of 15 months to 18 months.
ICICI Bank senior citizen FD rates
ICICI Bank provides various interest rates on its fixed deposit schemes, with specific rates depending on the tenure and customer's age. For example, ICICI Bank offers an interest rate of 7.50% on fixed deposit tenures ranging from 2 years to 5 years. Senior citizens can avail of a higher interest rate of 7.60% on fixed deposit tenures ranging from 15 months to 18 months.