SCSS vs SBI FD: Quarterly payout on Rs 7 lakh deposit

Senior citizens seeking stable income from investments often choose between the Senior Citizens' Savings Scheme (SCSS) and bank fixed deposits (FDs). SCSS provides five-year maturity with quarterly payouts, while FDs offer interest on maturity but can also be set for quarterly payouts. Public, private, and small finance banks offer various FD tenures, including a 5-year senior citizen FD from State Bank of India (SBI). This article compares the estimated quarterly payouts for Rs 7 lakh investments in SCSS and SBI FD.

SCSS offers an interest rate of 8.2% per annum, paid out quarterly. An investment of Rs 7 lakh in SCSS would yield approximately Rs 14,350 in interest each quarter, totaling around Rs 2,87,000 over five years, with a maturity value of about Rs 9,87,000. SBI's 5-year senior citizen FD, on the other hand, offers a slightly lower interest rate of 7.05%. With Rs 7 lakh invested, SBI FD would provide an estimated quarterly payout of Rs 12,337, amounting to approximately Rs 2,46,750 in interest over five years.

SCSS key features include quarterly payouts on March 31, June 30, September 30, and December 31, with the payment credited to the depositor's savings account on April 1, July 1, October 1, and January 1, respectively. This regular income stream can help senior citizens manage recurring expenses without needing to withdraw funds from their original investment.