FD Vs SCSS Vs RBI Bond: 20 lakhs will get 28 lakhs, who will give the most money in FD, SCSS and RBI Bond?

Business Desk – FD Vs SCSS Vs RBI Bond: After retirement, regular income and safe investment is the priority of every senior citizen. In such a situation, schemes like Senior Citizen Savings Scheme (SCSS), Fixed Deposit (FD) and RBI Floating Rate Savings Bond are considered to be the most popular options.

The question is that if a senior citizen has Rs 20 lakh to invest, then in which scheme will he get the highest returns? An interesting picture emerges when these three options are compared on the basis of interest rate, security and investment period.

SCSS is getting highest interest

Senior Citizen Savings Scheme (SCSS) is a special savings scheme of the Central Government, which has been specially designed for senior citizens. At present 8.2 percent annual interest is being given on this scheme. The duration of the scheme is 5 years and it can be extended further if needed.

If a senior citizen invests Rs 20 lakh in SCSS, he will get interest of approximately Rs 1.64 lakh annually. The total interest income in five years will be around Rs 8.20 lakh. This is the reason why at present SCSS is being considered the most attractive option in terms of interest rate.

Bank FD also remains a favorite scheme

Most of the banks in the country offer higher interest rates to senior citizens than normal customers. Many big banks are offering more than 7 percent interest on 5 year FD.

If an amount of Rs 20 lakh is invested in a 5-year FD and the average interest rate is considered to be 7.05 percent, then the investor can get interest of approximately Rs 8.36 lakh on maturity. The biggest advantage of FD is its easy availability and liquidity. If needed, the investor can break the FD prematurely, although some penalty may have to be paid for this.

How beneficial is RBI Floating Rate Bond?

RBI Floating Rate Savings Bond is also a government-backed investment option. The interest rate in this scheme may change from time to time, because it is based on floating rate. At present 8.05 percent annual interest is being given on this scheme.

By investing Rs 20 lakh, the investor will get interest of around Rs 1.61 lakh annually. In this scheme, interest is paid every six months, which benefits senior citizens who want regular income.

All three options are strong in terms of security

SCSS, RBI Bond and Bank FD are all considered safe investments. SCSS and RBI Bonds are directly backed by the government, while bank FDs also have the protection of Deposit Insurance to a certain extent. Although the investment period in SCSS and RBI Bond is relatively fixed, whereas in FD the investor gets more flexibility.

In which scheme will you get the maximum benefit?

If only interest rate and regular income are taken as the basis then SCSS appears to be the best option at present. With an interest rate of 8.2 percent, it is providing higher income to senior citizens than other options.

At the same time, for investors who may need cash from time to time, FD can be a better option. On the other hand, RBI Floating Rate Bond is useful for those who want government-backed investments and regular interest payments.

Keep these things in mind before investing

Experts say that investment decision should not be taken only by looking at high interest rates. It is also important to keep in mind the investment tenure, tax rules, liquidity, need for regular income and personal financial goals. Many financial advisors advise senior citizens to divide their investments among SCSS, FD and RBI Bonds to maintain a balance of both safety and returns.