If you're considering investing Rs 2.50 lakh in a secure savings option, the SBI Senior Citizen 5-year FD and National Savings Certificate (NSC) are both excellent choices, offering tax benefits under Section 80C. In this comparison, we'll analyse the interest rates, maturity amounts, and other key features of both schemes. Whether you're a senior looking for steady returns or seeking tax-saving investments, understanding the potential gains can help you make an informed decision
SBI Senior Citizen 5 year FD vs National Savings Certificate (NSC): What will be your maturity amount on Rs 2.50 lakh investment in each scheme; get calculations
Compare SBI Senior Citizen 5-year FD vs NSC to see which offers better returns on a Rs 2.50 lakh investment. Explore maturity amounts, tax benefits, and interest rates to decide.
ZeeBiz WebTeam | Sep 18, 2024, 06:05 PM IST
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Tax Benefits
Both SBI Senior Citizen 5-year FD and NSC offer tax benefits under Section 80C of the Income Tax Act, with deductions up to Rs 1.50 lakh in a financial year.
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Senior Citizen Savings Scheme (SCSS)
Interest Rates and Payments
- Interest Rate (effective from 01.01.2024): 8.2% per annum.
- Payment Frequency: Interest is payable quarterly on 1st April, 1st July, 1st October, and 1st January.
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Eligibility Criteria
Who Can Open:
- Individuals aged 60+.
- Retired civilian employees aged 55–60, with investment within 1 month of retirement benefits.
- Retired defense employees aged 50–60, with investment within 1 month of retirement benefits.
- Can be opened individually or jointly with a spouse.
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Deposit Limits
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Minimum Deposit: Rs1,000.
- Maximum Deposit: Rs30 lakh across all SCSS accounts.
Minimum Deposit: Rs1,000.
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Interest Details
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Quarterly Payment: No additional interest if not claimed on time.
- Auto-Credit: Available to savings accounts in the same post office or ECS.
- Taxation: Interest is taxable if it exceeds Rs50,000 per year. TDS applies unless Form 15G/15H is submitted.
Quarterly Payment: No additional interest if not claimed on time.
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Premature Closure
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Before 1 Year: No interest payable.
- After 1 Year but Before 2 Years: 1.5% deduction from the principal.
- After 2 Years but Before 5 Years: 1% deduction from the principal.
- Extended Accounts: No deduction after 1 year of extension.
Before 1 Year: No interest payable.
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Account Closure and Extension
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On Maturity: Can be closed after 5 years with prescribed form submission.
- Extension: Possible for 3 years, earning the applicable interest rate at the time of maturity.
On Maturity: Can be closed after 5 years with prescribed form submission.
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National Savings Certificate (NSC)
Key Features
- Eligibility: Suitable for government employees, businessmen, and salaried classes.
- No Maximum Investment Limit: No cap on investment.
- Tax Benefits: Qualifies for deduction under Section 80C of the IT Act.
- Interest Reinvestment: Interest is deemed reinvested annually for tax purposes under Section 80C.
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Transferability and Collateral
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Collateral Use: NSCs can be pledged as security for loans from banks.
- Transferability: Certificates can be transferred once during the investment tenure.
Collateral Use: NSCs can be pledged as security for loans from banks.
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Maturity Amount Comparison: NSC vs Senior Citizen Savings Scheme
NSC maturity amount for Rs 2.50 lakh
- Principal: Rs 2,50,000
- Total Interest: Rs 84,556
- Total Amount: Rs 3,34,556
Senior Citizen Savings Scheme maturity amount for Rs 2.50 lakh
- Principal: Rs 2,50,000
- Total Interest: Rs 1,02,500
- Total Amount: Rs 3,52,500