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Both the Senior Citizen Scheme and Fixed Deposit are safe schemes. The investment in them doesn't get lost. However, in the Senior Citizen Scheme, you receive interest on your savings account at regular intervals. You can use this for your expenses. However, in an FD, you receive a lump sum return upon completion of the scheme term.

Another peculiarity is that the Senior Citizen Scheme can only be applied for after the age of 60 or upon retirement. This scheme is specifically designed for retirees. Let's now find out which scheme will yield a higher return if you invest the same amount in both schemes for 5 years.

Which one will yield a higher return?
Investment amount: ₹2 lakh
Investment period: 5 years
How much will you earn from an FD?

Investment Amount - Rs 2 Lakh
Investment Period - 5 Years
Return - 7.5%

If a person deposits Rs 2 lakh in an FD for 5 years, they will receive Rs 2,87,126 at maturity at a 7.5% return. The return alone will yield Rs 87,126. Now let's find out how much profit they can earn from the Senior Citizen Scheme.

How much return can you expect from the Senior Citizen Scheme?
Investment Amount - Rs 2 Lakh
Return - 8.2%

If a person invests Rs 2 lakh in the Senior Citizen Scheme for 5 years, they will receive Rs 2,82,000 at maturity. Additionally, they will receive Rs 4,099 every three months. If the monthly payments are added, the total will be Rs 81,980 per year (4,099 x 4). In five years, this will become Rs 81,980. The number is multiplied by 4 because the scheme provides four payouts per year.

Which one will offer higher returns?
FDs offer higher maturity returns than the Senior Citizens' Scheme, despite offering lower interest rates. This is because FDs offer the benefit of compounding.

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