New Delhi: If you are over 60 and are planning to invest your hard-earned savings in a secure investment vehicle, you may consider placing your money in the Seniors Savings Program or term deposits.
India Post launched the Elderly Savings Program for Elderly Investors in 2004. The program is also run by public sector banks (PSBs) which also run the PPF program in nooks and crannies of the country.
In the Senior Citizens Savings Scheme, a state-backed retirement investment option, seniors can invest a lump sum and earn interest, tax claims, and other benefits.
On the other hand, anyone can invest in term deposit (FD) systems offered by public and private sector banks. However, all banks in India offer a better interest rate to senior citizens compared to the interest rate offered to investors under the age of 60.
Seniors Savings Plan vs Term Deposits: Comparison of Interest Rates
Investors can benefit from an interest rate of 7.4% on an annual basis on their investments in the Savings Plan for Seniors. The rate is in effect for the period from July 1, 2021 to September 30, 2021.
On the other hand, seniors can benefit from a maximum annual interest rate of 6.75% on their fixed deposit investments.
Senior savings plan vs term deposits: minimum investment
Seniors can open their FD account by investing a minimum of around Rs 1000 in some banks like the State Bank of India (SBI). However, in other banks, investors will need to invest a minimum of Rs 5000 to open their FD accounts.
In comparison, one can open an account with the Senior Citizens Savings Scheme by investing a minimum of Rs 1,000. Investors can invest up to Rs 15 lakh in multiples of Rs 1,000 in the senior investment program.
Seniors Savings Plan vs Term Deposits: Maturity period
Fixed deposit investments have a maturity period ranging from seven days to several decades. However, the Seniors Savings Plan expires in five years, with an option to extend the contract for another three years. Also Read: Gold Price Today, Aug 27, 2021: Gold Is Trading Rs 8,800 Cheaper From All-Time Highs, Should You Invest Now?
Seniors savings plan vs term deposits: tax advantages
Investors can claim a maximum of Rs 1.5 lakh per year as tax returns on term deposit investments and the Senior Citizens Savings Scheme under section 80C of the Income Tax Act. Income. Also read: WhatsApp’s New Feature May Allow Users to Listen to Voicemail Messages Before Sharing