Senior Citizen Savings Scheme Vs FDs For Senior Citizens: Which One Is Better

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The best thing to know at the time of your retirement is that your hard-earned money is safely and securely invested and you get assured returns from time to time that can meet your needs and pay for your indulgences.

The two investment products that satisfactorily meet your post-retirement requirements are Senior Citizen Savings Scheme and the Senior Citizen Fixed Deposit. These two products carry minimal risks while providing assured returns. To choose between the two products can be tricky. However, if you are clear about financial goals, you can select the best investment scheme for yourself based on various factors. 


  • Overview of Investments by Senior Citizens
  • Introduction to Senior Citizen Savings Scheme
  • Introduction to Senior Citizen Fixed Deposit
  • Which Option is Better For You

What is Senior Citizen Savings Scheme

Launched in 2004, Senior Citizen Savings Scheme is a government-sponsored investment product that intends to give a stable income to senior citizens. This scheme is specifically designed for those who have attained the age of 60 years or above. Those who have attained the age 55 years or more but less than 60 years can also opt for this savings scheme if they have retired under superannuation, VRS or special VRS. In case of the retired Defence personnel, the lower age limit has been set at 50 years if specified conditions are met.

You can make a minimum deposit of ₹1000 and a maximum deposit of ₹30 lakh while this deposit is exempted under section 80C of Income Tax Act. The account can be closed 5 years after it is opened. The interest rate is fixed by the government from time to time and it is earned only on a quarterly basis.

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What is Senior Citizen Fixed Deposit

A fixed deposit is an investment product in which you can deposit an amount for a particular period of time. The time frame available for the investment can range from several days to several years. The interest is earned on a monthly, quarterly, half-yearly or yearly basis, based on the preference of the investor.

The returns from the fixed deposit are guaranteed and there is no risk to the capital amount that you have invested, making it one of the safest investment options available in the market. The Senior Citizen Fixed Deposit is a variant of fixed deposit that is specifically tailored for senior citizens. It is marked by higher interest rates and is available for all citizens above the age of 60 years.

Which is Better For You?

It is a difficult choice to make between the Senior Citizen Savings Scheme and Senior Citizens Fixed Deposit. Much depends on your own choice of requirements and the investment goals that you have set for yourself.

Here is how you can decide which one is better for you: 

  • If you are sure to invest for a medium-term, then the Senior Citizen Savings Scheme is a better option for you. This scheme lets you invest for a period of 5 years, which can then be extended further by 3 years. 
  • Senior Citizen Savings Scheme will only let you earn interest on a quarterly basis in which case you will have to have a regular monthly income, in the form of a pension or some other source. 
  • Senior Citizens Fixed Deposit provides flexibility in deciding the tenor of interest, depending on your needs and requirements. You can avail the interest on monthly, quarterly, half-yearly or yearly basis, based on your convenience and needs. This option is not available with the Senior Citizen Savings Scheme.
  • Senior Citizens Fixed Deposit also lets you decide the tenor of your investment, which can range from as less as 7 days to a maximum of as high as 10 years. 


The Savings Scheme for Senior Citizens and the Fixed Deposit for Senior Citizens are both great investment options for senior and retired citizens. These schemes are among the least risky with guaranteed returns and a steady income. You can choose one among the two for the purpose of investment based on your financial needs and goals. You must carefully understand the requirements and shortcomings of both the investment options before you go ahead with it.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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