For most senior citizens, the income to run their homes from their savings comes from fixed deposit schemes. All the savings made throughout the years are converted into bank and Non-Banking Financial Companies (NBFC) fixed deposits as they are regarded as the safest kinds of investments by seniors. Most investors opt to earn monthly or quarterly income from their FDs and the interest earned is dedicated towards running the household in their years as retirees. Senior citizens also receive additional benefits on their FDs.
Features of the senior citizen FD scheme
While some of the features of a senior citizen fixed deposit are the same as those of regular FDs, others may differ. Both, regular investors and senior citizens can invest in FDs ranging from a period of 7 days to 10 years. However, senior citizens have the option to close their FDs prematurely, at any time.
Furthermore, the interest rate depends upon the chosen deposit period. For most senior citizen FDs, the interest rate is calculated on a quarterly basis. Typically, you can invest up to ₹1 crore in senior citizen FDs. Some FDs which come with a 5 year lock-in period can prove to be a tax-saving option for the investors.
Interest rates under FD schemes for senior citizens
Both banks and NBFCs provide senior citizens with special interest rates on their fixed deposit schemes. While the interest rates on FDs offered by banks are slightly lower as compared to NBFCs, banks are still the safer option. Also remember that some lenders (mostly NBFCs) usually have certain terms and conditions that the investor must follow. These terms and conditions vary from bank to bank and NBFC to NBFC, although the general principal remains the same. Also, to avail the special interest, you must invest in an FD for a period more than 1 year as short-term deposits are not eligible for senior citizen interest rates. Here are the top 5 banks of 2018 that offer the best interest rates to senior citizens on their fixed deposit in India.
Bank Less than 1 year 1-5 years 5 years and above
ICICI Bank 4.50% to 7.00% 7.00% to 7.25% 7.00%
SBI 6.25% to 6.90% 6.90% to 7.25% 7.25%
HDFC Bank 4.00% to 6.75% 6.255 to 7.00% 6.00%
Canara Bank 4.70% to 6.85% 6.50% to 7.00% 6.50%
HSBC Bank 3.50% to 5.50% 5.50% to 6.50% -
Keys benefits
Senior citizens can avail several benefits on their fixed deposits which include
• Accumulation and steady growth of their investments
• Higher interest rates as compared to regular fixed deposits
• Interest earned on FD schemes can be turned into monthly and quarterly income schemes, which is ideal for retirees with limited cash-flow
• FDs for senior citizens can also help them save taxes and the tax deductions can be claimed under Section 80C of the Income Tax Act of 1961
Features of the senior citizen FD scheme
While some of the features of a senior citizen fixed deposit are the same as those of regular FDs, others may differ. Both, regular investors and senior citizens can invest in FDs ranging from a period of 7 days to 10 years. However, senior citizens have the option to close their FDs prematurely, at any time.
Furthermore, the interest rate depends upon the chosen deposit period. For most senior citizen FDs, the interest rate is calculated on a quarterly basis. Typically, you can invest up to ₹1 crore in senior citizen FDs. Some FDs which come with a 5 year lock-in period can prove to be a tax-saving option for the investors.
Interest rates under FD schemes for senior citizens
Both banks and NBFCs provide senior citizens with special interest rates on their fixed deposit schemes. While the interest rates on FDs offered by banks are slightly lower as compared to NBFCs, banks are still the safer option. Also remember that some lenders (mostly NBFCs) usually have certain terms and conditions that the investor must follow. These terms and conditions vary from bank to bank and NBFC to NBFC, although the general principal remains the same. Also, to avail the special interest, you must invest in an FD for a period more than 1 year as short-term deposits are not eligible for senior citizen interest rates. Here are the top 5 banks of 2018 that offer the best interest rates to senior citizens on their fixed deposit in India.
Bank Less than 1 year 1-5 years 5 years and above
ICICI Bank 4.50% to 7.00% 7.00% to 7.25% 7.00%
SBI 6.25% to 6.90% 6.90% to 7.25% 7.25%
HDFC Bank 4.00% to 6.75% 6.255 to 7.00% 6.00%
Canara Bank 4.70% to 6.85% 6.50% to 7.00% 6.50%
HSBC Bank 3.50% to 5.50% 5.50% to 6.50% -
Keys benefits
Senior citizens can avail several benefits on their fixed deposits which include
• Accumulation and steady growth of their investments
• Higher interest rates as compared to regular fixed deposits
• Interest earned on FD schemes can be turned into monthly and quarterly income schemes, which is ideal for retirees with limited cash-flow
• FDs for senior citizens can also help them save taxes and the tax deductions can be claimed under Section 80C of the Income Tax Act of 1961
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