SCSS vs Senior Citizen Bank FD Calculator

Capital Safety & Sovereign Backing

• SCSS: 100% sovereign guarantee backed by the Government of India through the National Small Savings Fund (NSSF). Zero default risk regardless of the amount deposited.
• Bank Fixed Deposits: Commercial bank FDs are insured by the DICGC (Deposit Insurance and Credit Guarantee Corporation) only up to ₹5,00,000 per depositor per bank. For deposits above ₹5 Lakh, credit risk exists if a private or co-operative bank faces insolvency.

Premature Closure Penalties

• SCSS: Cannot be closed in Year 1 without special reasons. If closed between Year 1 and 2, a 1.5% penalty is deducted from the principal. If closed after Year 2, a 1.0% penalty applies.
• Bank FDs: Highly liquid; can be closed anytime online via mobile banking with a 0.5% to 1.0% interest rate haircut.

TDS (Section 194A) & Form 15H

Under Section 194A, banks and post offices will deduct 10% TDS if senior citizen interest exceeds ₹50,000 annually.

However, if your total estimated taxable income for the financial year is NIL, you can submit Form 15H at the beginning of each April to ensure zero TDS deduction at source.

Section 80C Tax Deduction at Entry

The initial deposit made into SCSS qualifies for a tax deduction up to ₹1,50,000 under Section 80C (under the Old Tax Regime). Bank fixed deposits only qualify for Section 80C if you opt for a locked-in 5-year 'Tax Saver FD' (which cannot be closed prematurely).