The two best investment options for senior citizens in the country are the Senior Citizen Savings Scheme (SCSS) and Bank Fixed Deposit (FD). Both are known as safe investment options and offer high returns. However, many senior citizens are confused about which one is better. In this article, we will discuss which of these two options can be more beneficial for senior citizens and provide all the necessary details.

SCSS Offers Strong Return of 8.2%

The Senior Citizen Savings Scheme (SCSS) is a government-backed, risk-free savings scheme. Senior citizens who invest in this scheme get a fixed tenure of 5 years, which can be extended for an additional 3 years. The maximum investment amount in SCSS is Rs 30 lakh, and it offers a tax deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act.

Currently, SCSS provides an annual interest rate of 8.2%, paid quarterly. However, the interest earned is fully taxable. The minimum investment amount for SCSS is Rs 1,000.

Benefits of Senior Citizen Fixed Deposit (FD)

Bank Fixed Deposits (FDs) are also considered a safe investment option for senior citizens. FDs offer interest rates for various tenures, ranging from 7 days to 10 years. In addition, the Deposit Insurance and Credit Guarantee Corporation (DICGC) insures bank FDs for up to Rs 5 lakh. There is no maximum limit on the amount that can be invested in a bank FD. If opened as a tax-saving FD, it also qualifies for a tax deduction of up to Rs 1.5 lakh under Section 80C.

SCSS Interest Rate

The government has not increased the SCSS interest rate for the current quarter (January–March 2025). Account holders will continue to receive an interest rate of 8.2%. The interest is paid every quarter and is fully taxable. The minimum deposit amount is Rs 1,000 and must be in multiples of Rs 1,000. An individual can invest up to a maximum of Rs 30 lakh across all SCSS accounts.

Interest Rates on FDs in SBI, PNB, and Canara Bank

State Bank of India (SBI) offers a 7.50% interest rate on a 5-year FD.
Canara Bank provides a 7.20% interest rate on a 5-year FD.
Punjab National Bank (PNB) offers a 7% interest rate on a 5-year FD.