As seniors prioritize stability and security in their financial planning, fixed deposits (FDs) remain a preferred avenue for parking their hard-earned money. In this article, we explore the latest interest rates offered by the State Bank of India (SBI) for senior citizens and shed light on the Senior Citizen Savings Scheme (SCSS), a popular option at post offices.
SBI’s Attractive Senior Citizen FD Rates
State Bank of India (SBI), the nation’s largest lender, continues to provide an array of enticing fixed deposit rates tailored for senior citizens. As of the last update on December 27, 2023, SBI offers an impressive interest rate ranging from 4% to 7.50%, depending on the tenure, which extends from 7 days to 10 years.
For a comfortable 5-year tenure, SBI caters specifically to senior citizens with a generous interest rate of 7.25%. These rates provide a secure avenue for the elderly to witness their savings grow steadily over time.
SCSS: A Lucrative Option for Senior Citizens
For those seeking alternatives, the Senior Citizen Savings Scheme (SCSS) is a robust choice. Tailored for individuals aged 60 and above, this scheme boasts a maturity period of five years, extendable for an additional three years. As of January 1, 2024, SCSS offers an attractive guaranteed interest rate of 8.2%, providing a stable and predictable growth trajectory for investments.
Senior citizens can invest up to ₹30 lakh in the SCSS, with the interest rate locked in at the time of investment. This scheme caters to the need for financial security while ensuring flexibility with the possibility of extension.
Tax Benefits for Senior Citizens
Investments in both SCSS and five-year bank FDs qualify for tax deductions under Section 80C of the Income Tax Act. Currently capped at ₹30 lakh for SCSS deposits, this provision enables individuals to claim deductions while securing their financial future.
However, it’s crucial to note that for SCSS deposits exceeding ₹50,000, Tax Deducted at Source (TDS) will be applied at a specified rate. This emphasizes the importance of careful financial planning to optimize returns while adhering to tax regulations.
Additionally, senior citizens can avail themselves of a deduction of up to ₹50,000 on the interest earned from deposits, including fixed deposits, under Section 80TTB of the Income Tax Act.
(Image credit: Pixabay)