Savings scheme

FD vs SCS scheme | Special SBI FD vs Senior Savings Plan: which one to choose?

SBI special FD vs Senior Citizen Savings Scheme: which one to choose

New Delhi: Planning for retirement is one of the key financial steps everyone should take to ensure they are financially stable after retirement. You need to save and invest enough to ensure that your retirement corpus is large enough that you can maintain your lifestyle even after retirement.

Bank Term Deposits (FD) and Savings Plan for Seniors (SCSS) are ideal investment opportunities, keeping the aspect of long-term stability and added additional benefits in consideration.

Recently, the country’s main lender, State Bank of India (SBI), announced the extension of the SBI “WECARE” term deposit program for the elderly.

Here is a comparison between the SBI “WECARE” Seniors Term Deposit Plan and the Seniors Savings Plan (SCSS) to help you choose the best investment option.

“SBI Wecare” deposit for Seniors

The State Bank of India (SBI) has extended its special term deposit program for seniors for the second time. In May, the lender announced the SBI “WECARE” term deposit program for the elderly for the elderly, which was initially available until September.

However, the SBI later announced that the program would be available until the end of March.

A special “SBI Wecare” deposit for seniors introduced in the Retail TD segment in which an additional bonus of 30 basis points (over and above the existing 50 basis points) will be paid to seniors on their retail TD for a period of “5 years and over” The “SBI Wecare” deposit system is extended until March 31, 2021, “SBI said on its website.

Right now, the bank offers an interest rate of 6.2%, which is lower than the government-backed pension plan. The special FD regime does not offer any additional tax benefit. You can invest in the SBI Wecare FD program for a minimum period of five years and a maximum period of 10 years.

If one chooses to withdraw a FD prematurely under the scheme, the investment will only earn an interest rate of 5.8%. Customers have until December 31 to invest in the SBI Wecare FD program.

Only senior residents aged 60 and over are eligible for the scheme.

Seniors Savings Plan (SCSS)

Investors over the age of 60 can deposit up to Rs 15 lakh over their lifetime into a senior savings plan to earn regular interest income. An elderly couple can invest up to Rs 30 lakh in this program. This has a blocking period of 5 years. Currently, the senior plan gives 7.4% interest.

Under the Senior Savings Plan, subscribers are authorized to make an early withdrawal but penalties are applied which are as follows:

If an exit from the plan is made before the expiration of a period of 2 years from the date of opening the account, 1.5% of the deposit balance is retained as a penalty.

If an exit from the device is between 2 years and less than 5 years from the date of opening the account, 1% of the SCSS balance is deducted as a penalty.

In contrast, deposits under the SCSS scheme count for the tax benefit under Article 80C of the Income Tax Law.


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