Senior Citizen Fixed Deposit Interest Rates

Fixed Deposits are one of the safest instruments to secure your savings and earn a guaranteed return. In fact Indian households have a conventional inclination towards fixed saving instruments. FDs are a significant part in the portfolio of most households in India. Depositors who are 60 years or above, are entitled to earn 50 bps additional Interest Rate from regular FDs. Thus Senior Citizen Fixed Deposits are one of the best options to park one’s life savings and earn an assured interest income at the same time.

Let’s run through various senior citizens FD Schemes from commercial banks, small finance banks and NBFCs and list out the best deposit schemes and fixed deposit interest rates for pensioners and retired individuals.

Senior Citizen FD: Rates, Features & Benefits

A Senior Citizen Fixed Deposit Scheme will yield 6 % to 8.24% basis the institution. The tenure of the FD can range from 7 days to 10 years. The highest yielding commercial bank senior citizen fixed deposit scheme is offered by YES Bank at 7.75% p.a, while highest yielding fixed deposit scheme from a small finance bank is from Jana Bank at 8.24%, both for tenure of 2 to 3 years.

Let’s take a quick look at top Senior Citizen Fixed Deposit Interest Rates in India from commercial banks as well as small finance banks.

Senior Citizen FD Rates by Small Finance Banks

• Rates are as per the bank websites.
• These are applicable to deposits below Rs. 2 crore.
• Rates as on December 9, 2020

Features of FD Schemes for Senior Citizens

The key benefits and features of fixed deposit schemes can be summarised as:

Tenure: The duration of an FD scheme can range from 7 days to 10 years. It may further vary as per the institution.

Interest rate: Most institutions offer 50 bps additional FD rates to senior citizens. In the current falling rate market, top banks are offering additional 30 bps over & above 50 bps to senior citizens on Fixed Deposits. Also the rates will vary as per FD term.

The returns are calculated on quarterly compounding basis. Some products also offer monthly, annual or semi-annual basis. With special rate and regular interest payout, Senior Citizen Fixed Deposits act as a source of supplementary income.

Tax benefit: FDs are also popular as they offer tax benefit. On a 5-year fixed deposit, an investor is entitled to claim deduction under section 80C for up to Rs. 1.5 lakh.

Eligibility for Senior Citizen FD

To be eligible for senior citizen FDs, you should observe following criteria:

• You should be 60 years or above. Some banks offer additional benefits to super seniors, i.e., those above 80 years of age.
• The criteria vary as per the policy of bank or institution. Some offer FDs to resident Indians only while many allow NRIs to open the accounts through NRE or NRO accounts.
• There are some products that cater to people who are more than 55 years and have opted for early retirement.

Documents required for opening Senior Citizen FD

Here is the list of documents for opening a Senior Citizen FD Account:

Photo ID proof: Copy of any of the approved documents for identity verification such as Passport, Voter ID Card, Aadhaar etc.

Age Proof: Matriculation Certificate or any legal document citing date of birth.

Residence proof: Any of the documents from Aadhaar Card, Passport, latest utility bills

Others: PAN Card (or Form 60) and Form 15H

FAQs

✅ Who is a senior citizen and who is a super senior citizen?

Anyone who is 60 years of age or more is termed as a senior citizen in India. Those above 80 years are termed as super senior citizens. Banks and all government departments offer additional privileges to seniors and super senior citizens.

✅ Which is the highest paying Fixed Deposit scheme for senior citizens?

Currently Suryoday Small Finance Bank and Jana Small Finance Bank are offering highest annual yield at 8.24%. Among the commercial banks, IndusInd Bank and Yes Bank are offering highest rate of interest at 7.5% return.

✅ Does interest income from FDs taxable for senior citizens?

Yes, as per IT Act. The interest earned over Rs 50000 in a financial year is charged at 10% at source. In case you are not liable for tax, submit form 15G or 15H to the bank.

✅ What is additional yield on Senior Citizen FDs?

Senior Citizens earn additional 50 bps from regular FD plans. Besides, the bank/ institution sometimes also offer special offers over and above the 50 bps.

✅ Why FDs are considered as safe investment for senior citizens?

Two main objectives of senior citizen investment plans are capital protection and guarantee of returns. With Fixed deposits, Senior Citizens achieve both goals, and the money grows gradually. The rates of return on Senior Citizen FDs are much assuring amid market volatilities.

Also Read: Post Office Recurring Deposit Scheme Interest Rates in 2021

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