A retiree with Rs 30 lakh in the Senior Citizens Savings Scheme (SCSS) earns Rs 61,500 every quarter at the current 8.2% rate, which the government left unchanged for October to December 2026. The RBI’s Floating Rate Savings Bond pays 8.05% for July to December 2026, and bank FDs for senior citizens sit wherever each bank chooses to price them.<\/p>\n\n
With retail inflation at 5.54% in September and the RBI raising the repo rate to 5.50% on 7 October, the choice between these three now depends less on the headline rate and more on how each one behaves when rates move. One locks your rate, one floats with it, and one lets you pick the tenure.<\/p>\n\n
All three pay regular interest with very low risk, but they differ on how the rate is set, how often it is paid and how easily you can exit. SCSS is a government scheme with a rate locked for five years, the floating rate bond is a seven-year Government of India bond issued through the RBI whose rate resets every six months, and a bank FD is a deposit whose rate and tenure you choose.<\/p>\n\n The floating rate bond is designed for a rising-rate phase, because its coupon is reset every six months at 0.35 percentage points above the prevailing NSC rate. SCSS locks today’s 8.2% for five years, which protects you if rates fall but leaves you behind if they rise, and a bank FD locks whatever the bank offers on the day you book it.<\/p>\n\n Think of SCSS as letting out a flat on a five-year lease at today’s rent, while the floating bond is a lease that resets to the market rent every six months. That said, the bond has paid 8.05% in every half-year since July 2023 because the NSC rate has not moved, and since small savings rates are benchmarked to government bond yields, only a sustained rise in those yields would lift the coupon.<\/p>\n\n Placed entirely in SCSS, Rs 30 lakh earns Rs 2.46 lakh a year at 8.2%, paid as Rs 61,500 each quarter, or about Rs 20,500 a month. The same amount in the floating rate bond earns Rs 2.415 lakh a year but pays it as Rs 1,20,750 every six months, so SCSS suits retirees who want income closer to a monthly rhythm.<\/p>\n\nFeature<\/th> SCSS<\/th> Floating Rate Savings Bond<\/th> Bank FD<\/th><\/tr><\/thead> Current rate<\/td> 8.2% (Oct to Dec 2026)<\/td> 8.05% (Jul to Dec 2026)<\/td> Set by each bank<\/td><\/tr> How the rate behaves<\/td> Fixed for 5 years at the opening rate<\/td> Resets every 6 months at NSC rate plus 0.35%<\/td> Fixed for the chosen tenure<\/td><\/tr> Interest paid<\/td> Quarterly<\/td> Half-yearly, 1 January and 1 July<\/td> Monthly, quarterly or at maturity<\/td><\/tr> Tenure<\/td> 5 years, extendable by 3<\/td> 7 years<\/td> Your choice<\/td><\/tr> Limit<\/td> Rs 30 lakh per person<\/td> Minimum Rs 1,000, no upper limit<\/td> No limit<\/td><\/tr> Early exit<\/td> After 1 year, with a 1.5% penalty up to 2 years and 1% after that<\/td> Only for senior citizens, after 6, 5 or 4 years depending on age<\/td> Usually allowed with a rate penalty<\/td><\/tr> Who can invest<\/td> Residents aged 60 or above (55 for VRS and superannuation retirees)<\/td> Resident individuals and HUFs<\/td> Anyone<\/td><\/tr><\/tbody><\/table><\/figure>\n\n Which one pays more when rates are rising?<\/h2>\n\n
How much monthly income does Rs 30 lakh generate?<\/h2>\n\n