After retirement, senior citizens often look for safe investment avenues that offer steady and secure income. While Fixed Deposits (FDs) are popular, there's a government-backed scheme that could give them better returns — the Senior Citizens Savings Scheme (SCSS). With an attractive interest rate and tax benefits, this scheme can help earn more than ₹12 lakh over 5 years — solely from interest.
FDs have long been the go-to option for retirees. But FDs offer limited returns, even with the additional 0.50% interest usually given to senior citizens. In comparison, SCSS offers a fixed interest of 8.2% per annum, which is higher than many current bank FD rates.
Interest Rate: 8.2% per annum (paid quarterly)
Maximum Investment Limit: ₹30,00,000
Minimum Investment: ₹1,000
Maturity Period: 5 years (with a one-time 3-year extension option)
Tax Benefits: Eligible for tax deduction under Section 80C
Note: You must apply for the extension within 1 year of the scheme’s maturity. The extended account earns interest as per the rate applicable at maturity.
Let’s assume you invest the maximum limit of ₹30,00,000:
Quarterly Interest: ₹61,500
Annual Interest: ₹2,46,000
Total Interest in 5 Years: ₹12,30,000
✅ Total Maturity Amount = ₹30,00,000 (Principal) + ₹12,30,000 (Interest) = ₹42,30,000
If you invest ₹15,00,000:
Quarterly Interest: ₹30,750
Annual Interest: ₹1,23,000
Total Interest in 5 Years: ₹6,15,000
✅ Total Maturity Amount = ₹15,00,000 (Principal) + ₹6,15,000 (Interest) = ₹21,15,000
Anyone aged 60 years or above
VRS retirees from civil sector (age relaxation allowed under certain conditions)
Defense retirees (also eligible with age relaxations)
If you're a retiree looking for a safe investment with regular income, SCSS is a fantastic alternative to FDs. It not only offers higher returns but also guarantees capital safety and tax advantages. With smart planning, a senior citizen can easily earn over ₹12 lakh in 5 years — just from interest.
