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Senior Citizen Saving Scheme vs Bank Fixed Deposit: The repo rate was increased several times by the Reserve Bank of India to control inflation. In such a situation, the country’s public, private and finance banks increased the rate of Fixed Deposit. Due to many changes in FD interest, some banks are giving 8 to 9 percent interest on fixed deposits to senior citizens. At the same time, the interest of Senior Citizen Saving Scheme has also increased under Small Saving Scheme.
Senior Citizen Savings Scheme is a scheme that gives income every month after retirement. In this, the benefit can be availed by depositing a lump sum amount. The benefit of this scheme is given only after 60 years. This is a safe investment scheme launched by the government. On the other hand, a lump sum amount can be taken on completion of tenure in bank FD and this is also a safe investment option. In such a situation, if this question is arising in your mind that where to invest, then let us understand through interest, tax exemption and tenure, which option can be good for you.
Where is getting more interest
For the last quarter of the financial year 2022-23, the central government had increased the interest of the Senior Citizens to Wing Scheme (SCSS) and at present 8 percent interest is being paid annually. On the other hand, if you want to invest in bank FD, then IDFC First Bank will give 4 to 8 percent interest. DCB Bank is giving 4.23 to 8.35 percent interest and Yes Bank is giving 3.75 to 8 percent interest to senior citizens. The tenure of bank FDs ranges from 7 days to 10 years, while the tenure of Senior Citizen Savings Scheme is for 5 years.
income tax exemption
Some tax exemption is given on bank FDs with a tenure of 5 years and above, but under the Senior Citizen Savings Scheme, a rebate of up to Rs 1.5 lakh can be obtained under Section 80C of Income Tax. The limit of investment in this has been made Rs 30 lakh annually. At the same time, you can invest at least 1000 rupees in bank FD.
which would be a better option
If you want to earn guaranteed income every month after 60 years without putting your money at risk, then Senior Citizen Savings Scheme would be a better option for you. It will also result in tax saving of up to Rs 1.5 lakh annually. Whereas in FD, you can take advantage of a lump sum amount by making any investment. However, you should invest only after comparing interest and risk.
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