Senior Citizen Savings Scheme (SCSS) vs Senior Citizens Special FDs: Which offers best returns? (2024)

The Reserve Bank of India (RBI) has been raising the repo rate since May 2022, which has led to banks raising their deposit interest rates. Most of the banks offer an additional interest rate of .50 per cent to senior citizens over the regular fixed deposit interest rates. Further, some banks including the State Bank of India (SBI), ICICI Bank, and HDFC Bank offer special fixed deposits to senior citizens with a higher interest rate for a specific tenure.

Meanwhile, the Union government is also taking various measures to provide senior citizens with a comfortable life in their retirement period. For this quarter, the central government has hiked interest rates of various small savings schemes including the Senior Citizen Savings Scheme. Further, Budget 2023 hiked the maximum investment limit of the Senior Citizen Savings Scheme (SCSS) to Rs 30 lakh.

Also read: Latest Bank Fixed Deposit (FD) Interest Rates in India for 2023

Here is a quick comparison between senior special fixed deposit and senior citizen savings schemes based on their interest rates.

Senior Citizen Savings Scheme (SCSS)
Government-backed Senior Citizen Savings Scheme (SCSS) is one of the most popular investment options among retirees. The minimum investment limit is Rs 1,000 while the maximum investment can go up to Rs 15 lakh. The interest rate offered on this account for this quarter is 8 per cent which is payable every quarter and fully taxable. Do note that once the investment is done the interest rate remains the same throughout the tenure.

Also read: Senior Citizen Savings Scheme's investment limit increased to Rs 30 lakh: Budget 2023

It has a five-year tenure, but it can be further extended by three years on maturity. The account holder has the option to extend the account for another three years from the date of maturity by submitting the appropriate paperwork along with the passbook to the relevant post office. Investment under this scheme qualifies for the benefit of section 80C of the Income Tax Act, 1961.

SBI We Care FD
SBI offers an additional premium of 30 bps over & above the existing 50 to Senior Citizen’s on their retail TD for '5 Years and above' tenor only. "SBI Wecare” deposit scheme is valid up to 31st March, 2023. The interest rate offered on this special FD is 7.50% for senior citizens.

ICICI Bank Golden Years FD Interest Rates
Investors can earn an additional interest rate of 0.10 per cent over and above the fixed deposit interest rate applicable to senior citizens. The interest offered under the special FD is 7.50%.

This special rate is applicable for fixed deposits of up to Rs 2 crore with a tenure of five years and one day to up to 10 years. This special scheme is valid till April 7, 2023.

HDFC Senior Citizens Care FD
Senior citizens can earn an additional interest of 0.25% (over and above the existing premium of 0.50%) if they book a fixed deposit of less than Rs 5 crore for a tenure of five years and one day and 10 years, during the special deposit offer commencing from May 18, 2020, to March 31, 2023. The interest rate offered on Senior Citizen Care FD is 7.75%.

IDBI Bank Naman Senior Citizen Deposit
Senior citizen customers will get an additional interest rate of 0.25% over and above the existing additional rate of 0.50% offered to senior citizens(total markup of 0.75% over the card rate). The scheme is valid for tenure for more than one year to up to 10 years.
According to the website, the interest rate offered is 7.50% on deposits maturing between one year and two years (except 444 Days & 700 Days) and 7 per cent on deposits maturing between three years and 10 years. The additional rate will be available on fresh deposits opened as well as deposits renewed during the scheme period. Do note that this scheme is valid up to March 31, 2023.

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