When planning for safe and steady returns, two popular options often come up—SBI’s 5-Year Fixed Deposit and the Senior Citizens Savings Scheme (SCSS). Here’s a comparative look at what a Rs 11 lakh investment could earn you in each scheme over five years.
SBI 5-Year Fixed Deposit (FD)
The State Bank of India currently offers interest rates ranging from 3.05% to 6.60% for general depositors and up to 7.10% for senior citizens, depending on tenure. For the purpose of this comparison, we’ve calculated the returns using a 6.5% annual interest rate for a 5-year term.
- Investment Amount: Rs 11,00,000
- Estimated Interest Earned: Rs 4,18,462
- Total Maturity Value: Rs 15,18,462
- Quarterly Income (approx.): Rs 20,923
Please note: SBI FDs usually compound interest quarterly but may not offer direct quarterly payouts unless a special interest payout FD scheme is chosen.
Senior Citizens Savings Scheme (SCSS)
SCSS offers a higher fixed return of 8.2% per annum as of January 1, 2024, payable quarterly. This makes it an attractive choice for senior citizens looking for regular income.
- Investment Amount: Rs 11,00,000
- Quarterly Income: Rs 22,549.96
- Total Interest Over 5 Years: Rs 4,50,999.18
- Maturity Amount: Rs 15,50,997.18
SCSS ensures consistent quarterly payouts and is backed by the government, making it a low-risk and dependable option. However, it’s only available to eligible senior citizens or retired individuals under specific conditions.
Which one should you pick?
If you’re a senior citizen seeking regular quarterly income, SCSS clearly offers better returns, both in terms of quarterly payouts and total maturity value. SBI’s FD, while a solid option, offers slightly lower earnings in comparison. However, SBI FDs might appeal to those who prefer lump sum maturity or fall outside the SCSS eligibility criteria.
(Disclaimer: Don’t consider this as an investment advice. Do your own due diligence or consult an expert for financial planning)
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