Is This a Good Time to Lock Money in SCSS in 2021?

Senior Citizen Savings Scheme (SCSS) is a small savings scheme that is preferred by senior citizens who want to earn sufficient returns without exposing their investments to market risks. The interest offered by SCSS is much higher than bank FD rates as of now. Therefore, the senior citizens who initially preferred investing in a fixed deposit because of the convenient investment and easy withdrawal options it provided might think of investing in SCSS in 2021. 

 

However, the question of whether it is the best investment option for senior citizens is debatable as senior citizens can ponder over other investment avenues as well. For instance, they can invest in a credible company FD like Bajaj Finance FD as it is offering both stable and sufficient interest earnings to investors. Also, the senior citizen FD rates offered by this FD scheme are much higher than bank FD rates. The features of Bajaj Finance FD that make it a better option than SCSS are explained below:

 

Benefits for senior citizens 

 

SCSS is only applicable for senior citizens whereas both seniors and non-seniors can deposit their capital in Bajaj Finance FD. Bajaj Finance FD gives senior citizens an opportunity to earn higher interest than others by providing them with an extra FD interest rate of 0.25%. 

 

They also have the option of choosing between yearly, six-monthly, quarterly, and monthly interest payout options whereas SCSS comes with only the quarterly interest payout option. 

 

Tenor options 

 

SCSS comes with a fixed tenor of 5 years and you can renew your investment by only 3 more years after tenor completion. However, you will not face any such restriction with Bajaj Finance FD. This FD scheme comes with a flexible tenor range spanning from 12 months to 60 months. 

 

Also, you have the liberty of opening multiple FD accounts at once. This means that you can divide your capital into deposits of smaller values and invest them in multiple FDs that may vary when it comes to tenor and FD type. As a result, laddering deposits becomes much more convenient with Bajaj Finance FD which makes it a happening choice for those who want to invest smartly in FDs and enjoy more liquidity options in the future.

 

Premature Withdrawals

 

If you think of withdrawing or closing your SCSS account prematurely, you will be able to do so only post completion of 1 year from the account opening date. You will also have to pay a penalty that can vary from 1 to 1.5% depending on how much period your investment has completed before the withdrawal. 

 

With Bajaj Finance FD, you can withdraw your funds only after 3 months post the investment date and you will need to pay a nominal penalty for withdrawing your deposits early. Also, you may not even think of withdrawing your FD as the option of availing of a loan against deposits will be available. Therefore, Bajaj Finance FD seems to be a much better option in this department. 

Moreover, Bajaj Finance FD is as safe as SCSS as credit rating agencies have recognized it to be a credible investment option and have provided it with the best credit ratings. You may check their CRISIL and ICRA ratings to confirm the same. Therefore, there are several reasons that make Bajaj Finance FD investment one of the best fixed deposit in India.

 

As a senior citizen, you can ensure that you earn well from your savings by investing them in SCSS. Though SCSS offers higher interest rates than bank FDs, it might not be as flexible when it comes to tenor, withdrawal norms, and investment options. Bajaj Finance FD seems to be the better choice because it not only provides a high interest rate like SCSS but also allows you to benefit from the flexible tenor, easy investment, and withdrawal options that a regular FD provides. Moreover, features like a multi-deposit facility ensure that you invest smartly in this FD scheme. Non-seniors can get 0.10% additional FD by investing through its online FD form and senior citizens get a 0.25% higher FD rate irrespective of the investment mode they opt for.

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