Senior citizens who want to get a stable return from their investments invest in fixed income schemes such as fixed deposits and the National Savings Certificate (NSC). In both investments, they get return at the locked-in interest rate. While the maturity period of an FD is five years, FDs can have a maturity period of 7 days to 10 years.
But if you are a senior citizen who wants to invest Rs 2.5 lakh in a fixed income scheme for five years, where can you get a higher maturity amount- NSC or bank FDs? Will there be tax benefits on investing in the NSC or a bank FD? Will your interest earnings from both be taxed? In this write-up, we will calculate the maturity amount on Rs 2.5 lakh investment in the NSC and a 5-year senior citizen FD from State Bank of India (SBI), Punjab National Bank (PNB), HDFC Bank, ICICI Bank, and others. We will also talk about tax benefits on investment in both schemes and tax treatment of interest earnings.
