Rs 7 lakh in SCSS vs SBI FD: Which gives senior citizens higher quarterly income? Compare interest rates and payouts

Senior citizens often compare SCSS and bank fixed deposits to generate income from their savings. SCSS has a five-year maturity period, while bank FDs offer different tenures. This comparison looks at a Rs 7 lakh investment in SCSS and a five-year SBI senior citizen FD, focusing on their interest rates, quarterly payouts and total interest over five years.

The two schemes offer different interest rates:
● SCSS: 8.2% per annum, with interest paid quarterly.
● SBI 5-year senior citizen FD: 7.05% per annum.
SCSS pays interest quarterly. SBI FD investors can opt for a quarterly interest payout, subject to the bank's deposit terms.

At an annual interest rate of 8.2%, a Rs 7 lakh investment in SCSS can provide approximately Rs 14,350 every quarter. Over the five-year maturity period:
● Quarterly interest: Rs 14,350
● Total interest over five years: Rs 2,87,000
● Maturity amount: Rs 9,87,000, including the original deposit

At an interest rate of 7.05%, a Rs 7 lakh investment in SBI’s five-year senior citizen FD can provide an estimated quarterly payout of Rs 12,337, assuming a quarterly interest payout option. Over five years:
● Quarterly payout: Rs 12,337
● Total interest over five years: Rs 2,46,750

SCSS interest is payable on March 31, June 30, September 30 and December 31. The amount is credited to the depositor's savings account on April 1, July 1, October 1 and January 1, respectively. These regular payments can help senior citizens meet recurring expenses without withdrawing money from their original investment.