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FD or NSC: Where will senior citizens get more profit on Rs 2.5 lakh?
- •Senior citizens usually prefer to keep their lifetime savings in safe government schemes after retirement.
- •An investment of Rs 2.5 lakh in the National Savings Certificate at 7.7 percent interest yields a maturity amount of Rs 3,62,258.
- •A 5-year fixed deposit in State Bank of India provides a total maturity amount of Rs 3,54,565 for senior citizens.
- •In a 5-year FD of Punjab National Bank, the maturity amount received can be Rs 3,51,097.
- •Both NSC and 5-year tax-saver FDs offer tax exemption benefits of up to Rs 1.5 lakh under the old tax regime.
Key Questions Answered
Investing Rs 2.5 lakh in the National Savings Certificate (NSC) at a 7.7 percent interest rate yields a total maturity amount of Rs 3,62,258. In comparison, a 5-year senior citizen fixed deposit with the State Bank of India yields Rs 3,54,565, while Punjab National Bank offers Rs 3,51,097 at maturity.
Both the National Savings Certificate and 5-year tax-saver fixed deposits offer tax exemption benefits of up to Rs 1.5 lakh on the deposited amount under Section 80C. However, this advantage is restricted exclusively to taxpayers who select the old tax regime.
No, tax exemption is not available simply by investing in a standard regular fixed deposit. Conditional tax exemption benefits apply only when investing in a designated 5-year fixed tenure tax-saver FD.
