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Best Savings Scheme in India: Fixed Deposit FD is one of the savings schemes that provide income without any risk. Although the Reserve Bank of India RBI has reduced the repo rates by 1 percent, interest rates on fixed deposits are gradually decreasing. This is the reason why senior citizens are not interested in investing in them. However, a plan to be offered by the post office is attracting senior citizens with high interest rates. This scheme is a good option for those who want a certain income as well as tax benefits. This is the Senior Citizen Savings Scheme SCSS. Let us learn about the interest rates implemented under this scheme and the details of the scheme.
What is the interest rate?: The central government amends interest rates on various savings schemes every quarter. It has announced interest rates on small savings schemes like Public Provident Fund (PPF), National Savings Scheme NSC, Senior Citizen Savings Scheme SCSS etc. for the July-September quarter of FY 2025-26. According to the government announcement, there has been no change in the interest rates applicable to Senior Citizen Savings Scheme and others. The previous interest rate of 8.2 percent will continue. This interest is deposited in the account every 3 months. It is noteworthy that only a few banks are implementing more than 8 percent interest rates on FDs.
Interest rates on FD: Public sector banks like SBI 7.35 percent on fixed deposits designed for senior citizens; Punjab & Sindh Bank 7.55 percent; Indian Overseas Bank 7.45 percent; And Karur Vaishya Banks provide 7.25 percent interest rate. Axis Bank offers the highest 7.25 percent interest rate at 5 to 10 years FD. HDFC Bank 7.1 percent on FD of 18 to 21 months; 7.10 percent on ICICI Bank 2 to 10 years FD; And Yes Bank offers the highest interest rate of 7.85 percent. Compared to all these, the Senior Citizen Savings Scheme offers a higher interest rate, making it a good investment for those investing in it.
What is the details of the scheme?: People saving for a period of 5 years under SCSS are eligible to deduct tax deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. A maximum of 30 lakh rupees can be saved under this scheme. After the completion of a period of 5 years, the account holder can discontinue the scheme. If needed, it can be extended further for 3 years. If the account holder dies during the maturity period, then interest on the post office savings account will continue to be received from the same day. If the wife is a joint holder or nominee, the account can be continued.