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Senior Citizen FD in India 2023

Fixed Deposits are a go-to investment tool for all investors with low to middle-income revenues. Moreover, several kinds of Fixed Deposits suit an array of customer needs. One such FD type is the Senior Citizen Fixed Deposit which has been becoming a niche investment option for residents in India. Senior citizen FDs allow investors to contribute their monetary capital, which is repaid to them after retirement. This can be a beneficial income for citizens after their work years which they can utilise to meet their varying financial needs. There are specialised interest rates for senior citizens opting for the scheme. Furthermore, banks offer attractive and competitive interest rates giving customers the best user experience. Do Not only senior citizens get an additional interest rate hike, but they also get taxable benefits if opted for the 5-year tax saver investment scheme.

Benefits of FD for Senior Citizens

The senior citizen Fixed Deposits offer many benefits to its customers, thereby fulfilling a myriad of their needs. Since the financial cover can be very much needed for anyone retiring from work, this specialised term deposit is the go-to investment plan for many. Some of the significant benefits of using a fixed deposit scheme for senior citizens are as follows.

  • The recurring payout structure for the investors posts the maturity period. Customers can opt for a steady income or can opt for a cumulative structure of payment. This can enable a much-required financial cover for investors in their post-retirement period.
  • Not only that but also there is also the provision to select the frequency of the interest payout. Investors can choose to be paid monthly, quarterly, half-yearly, or even years.
  • Switching provisions from senior citizen FD to tax saver investment bonds can allow investors to claim tax benefits per section 80C of the Income Tax Act.
  • Senior citizen Fixed Deposits are considered a safe investment option assuring a guaranteed return.
  • A backup source of income can become a much-required financial cushion for the customers, especially for senior citizens.
  • With FD funds, banks assure the security of the monetary capital despite the fluctuating market behaviour.
  • Provision of taking a loan on the investment. However, this facility is not generally available in the case of tax saver FD funds.

Senior Citizen FD Interest Rates

FDs for senior citizens are offered by almost all banks with specialised interest rates. This gives senior citizens the upper hand, allowing them to earn high income compared to the regular Fixed Deposits.

Furthermore, the Senior citizen FD interest rates offered by financial institutions are competitive and attractive, allowing the customers to pick the best one that suits their needs. Here is a comparative representation of the interest rates of several banks in India offering the Senior Citizen Fixed Deposit scheme.

Name of the BankInterest Rate
Citibank2.35% to 4.00%
Indian Overseas Bank3.90% to 5.70%
IDBI Bank3.20% to 6.55%
Bank of Baroda3.50% to 5.60%
Indian Bank3.30% to 6.10%
Oriental Bank of Commerce3.50% to 5.60%
Andhra Bank3.50% to 4.60%
Bank of India2.85% to 6.10%
Punjab National Bank3.50% to 6.25%
Allahabad Bank3.30% to 5.65%

These figures are based on the current rates trends and may change as per individual bank policies.

Top Bank Senior Citizen FD Rates

Some of the top banks that offer the senior citizen fixed deposit scheme incorporate the following rates of interest.

Bank NameRate of Interest
SBI2.90% to 5.40%
HDFC Bank3.00% to 6.25%
Canara Bank2.95% to 6.00%
Punjab National Bank3.40% to 5.75%
HSBC Bank2.75% to 4.50%

Eligibility for Senior Citizen FD

The Fixed Deposit scheme for senior citizens comes with a few parameters that the customers need to adhere to. These eligibility criteria are as listed below.

  • The applicant needs to be a citizen of India.
  • In the case of Non-resident Indians, need to open an NRE or NRO account with the respective bank.
  • The customer is required to be 60 years and above. However, some banks also accept 55 years as the minimum age threshold.
  • Applicants should be able to produce necessary documents pertaining to their identification and residential address proofs.

Documents required for opening Senior Citizen FD

Customers interested in opening a senior citizen fixed deposit account will be required to produce a few documents that will authenticate their claims of identity, age, and residence status. There are a few general documents that are acceptable to financial institutions. Some of these documents include the following.

  • Aadhaar Card
  • PAN Card
  • Voter Card
  • Government-issued photo identity card
  • Passport
  • Driving Licence

Features of Senior Citizen Fixed Deposit

Senior Citizen Fixed Deposits come with an array of crucial features that makes them an attractive investment option for many.

  • Specialised Interest rates - Senior Citizen FD schemes allow customers to enjoy a higher interest rate than regular fixed deposit plans.
  • Assured returns - With a higher interest rate, senior citizen FDs also guarantee an assured return to their investors. This makes the risk involved from minimal to nil.
  • Fund safely - All the banks and NBFCs offering the Senior Citizen FD scheme are regulated by the RBI, making it a safe house for the funds. There is accountability and insurance involved with the invested monetary capital.
  • Flexibility in the interest payout - Customers have the provision to choose the frequency of the interest payout post-maturity period. They can choose to be paid monthly, quarterly, half-yearly, or annually.
  • Ease in booking the service - Applying for a senior citizen FD scheme has become simple and hassle-free with online banking services. Customers can merely apply for the services online from the comfort of their homes.
  • Additional features - Fixed Deposits have a few special features, including an overdraft facility, a premature withdrawal facility, and a sweep-in facility.

Taxes on Senior Citizen FDs

The tax levied on FD interest is the Tax Deducted at Source (TDS), which the bank or NBFC will pay. You will receive or pay the difference if the bank/NBFC pays a surplus or deficit TDS on FD interest. If the amount saved on your FD exceeds Rs 40,000, TDS is deducted at 10% if you provide your PAN information. If the information is unavailable, tax is levied at 20%. TDS does not apply to Post Office Term Deposits. Individuals must declare the interest earned on the Post Office FD when filing their income tax returns. For senior citizens, no TDS is applicable if the interest on fixed deposit accounts exceeds Rs. 50,000.

Frequently Asked Questions

Which bank is best for the fixed deposits for senior citizens?

Fixed deposits for senior citizens are offered specialised interest rates and competitive rates across banks. Most banks offer interest rates of 3% to 6%. However, the best banks in terms of interest rates are IDBI, PNB, and Indian Bank.

What is the current FD interest rate for senior citizens?

The current interest rate in Fixed Deposits for senior citizens ranges from 2.35% to 6.25%. The top banks, such as SBI, HDFC, PNB, Canara, and HSBC, offer a rate of interest ranging from 2.90% to 6.25%.

Which Indian Bank gives the highest interest on FD for senior citizens?

Several Indian banks offer more than a 6% interest rate. These banks include Federal, HDFC, HSBC, IDBI, etc.

What is the interest on INR 1 lakh in senior citizens FD?

The interest computed on an investment of INR 1,00,000 depends on the bank’s rate of interest. For example, if the interest rate is set to be 5%, the interest will be INR 5,000.