SCSS vs Senior Citizen Fixed Deposit: Which is better for elderly people?

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small savings schemes. These are considered low-risk instruments. If we talk about senior citizens' FDs, elderly people get an additional rate of interest that can go up to 0.50% more than the general public.

The government hiked interest rates on the senior citizen savings scheme (SCSS) in April 2023. At present it is offering an 8.2 per cent rate. Senior citizens should give priority to Senior Citizen Savings Schemes over Fixed deposits, said Viplav Majumdar, Certified Financial Planner, Director, Planyourworld.com “SCSS has a higher interest of 8%, and this investment is covered under tax saving investment u/s 80C.

Whereas a senior citizen fixed deposit gives you a 7.5% return without tax saving benefit if the tenure is less than five years," said Viplav Majumdar. Choosing between SCSS and Senior Citizen Fixed Deposit is like navigating the financial tides of retirement. “SCSS sets sail with higher interest rates, but its limited investment cap leaves seniors longing for more.

Meanwhile, the FD banks offer a vast ocean of possibilities, supporting larger investments, and flexible tenures. The current may favor liquidity in FDs, but SCSS gracefully glides with quarterly interest payments. So, sail wisely, seniors, for your financial horizon awaits your prudent choice," Amit Gupta, MD, SAG Infotech said.

Whether it is SCSS or Senior Citizen Fixed Deposit, returns from both investments are taxable in the hands of investors. “In both investments the real return after the deduction of Income Tax and adjusting inflation, the returns are negative. Moreover, the interest is constant for all the years, but your expenses grow constantly," said Certified Financial Planner Viplav Majumdar.