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Senior Citizen Fixed Deposit Interest Rates 2024

Updated on: 19 Jan 2024 | 10 min read

Investment choices depend on age and life situation. You do not have dependents when you are young, and your risk-taking capacity is high, so you keep your portfolio equity heavy. When you are in the 30- 50 age group, you rearrange your investments based on your children’s future plans. As you approach 60, your regular income either stops or reduces as you may finally retire from your regular job. So, a wise choice is to have assets that could earn a regular income and build an emergency fund to prepare for health-related crises. So, as senior citizens, you seek avenues that protect your capital and give fixed returns.
 

Fixed deposits have always been popular for fixed and nearly risk-free returns. They can also act as collateral while taking a loan and offer tax benefits. Moreover, senior citizen FD rates are higher by almost 0.25% to 0.65% compared to interest rates for the general public. All banks provide fixed deposits to senior citizens. However, they might differ regarding tenure, interest rate, premature withdrawal facilities, etc.
Some banks also offer Senior Citizens savings scheme accounts. This scheme allows senior citizens to invest up to 30 lakhs for a fixed SCSS interest rate. The interest calculations could be compounded quarterly, semi-annually, or annually. Continue reading to learn in detail about fixed deposits for senior citizens.

Senior Citizen FD Rates of Small Finance Banks

Bank NameInterest Rates (% p.a.)
 Highest slab1-year tenure3-years tenure5-years tenure
AU Small Finance Bank8.57.258.57.75
Capital Small Finance Bank8.257.87.87.75
Equitas Small Finance Bank98.78.57.75
ESAF Small Finance Bank96.57.256.75
Fincare Small Finance Bank9.218.258.718.6
Jana Small Finance Bank98.597.75
North East Small Finance Bank9.257.258.57
Shivalik Small Finance Bank8.68.68.57.5
Suryoday Small Finance Bank9.17.359.18.75
Ujjivan Small Finance Bank8.758.757.77.7
Unity Small Finance Bank9.57.858.158.75
Utkarsh Small Finance Bank9.18.69.18.1

Senior Citizen FD Rates of Private Banks

Bank NameInterest Rates (% p.a.)
 Highest slab1-year tenure3-years tenure5-years tenure
Axis Bank7.757.27.67.75
Bandhan Bank8.357.757.756.6
Dhanlaxmi Bank7.757.2577.1
HDFC Bank7.757.17.57.5
ICICI Bank7.657.27.57.5
IDBI Bank7.657.377
IDFC First Bank877.257.5
IndusInd Bank8.258.2588
J&K Bank87.677
Karnataka Bank7.657.356.96.9
Kotak Mahindra Bank7.757.67.66.7
Karur Vysya Bank87.47.46.9
Nainital Bank7.557.26.756.25
RBL Bank8.5887.6
SBM Bank8.756.56.58.25
South Indian Bank7.97.276.5
Tamilnad Mercantile Bank7.57.577
YES Bank8.257.7588

Senior Citizen FD Rates of Public Banks

Bank NameInterest Rates (% p.a.)
 Highest slab1-year tenure3-years tenure5-years tenure
Bank of Baroda7.757.257.757.15
Bank of India7.7577.256.75
Bank of Maharashtra7.576.756.5
Canara Bank7.757.357.37.2
Central Bank of India7.657.2576.75
Indian Bank7.756.66.756.75
Indian Overseas Bank7.67.377
Punjab National Bank7.757.257.57
Punjab & Sind Bank7.96.96.56.5
State Bank of India7.67.377.5
UCO Bank7.556.756.86.7
Union Bank of India7.56.877.2

Features of Senior Citizen Fixed Deposit Schemes

Now, let’s look at some salient features of senior citizen fixed deposits:

  • Tenure: The tenure of an FD can range from 7 days to 10 years, depending on the banks offering them. Banks currently offer various tenures for FDs – short-term, medium-term, and long-term. You can select an FD with a tenure suitable to you.
  • Taxation: As per Section 80TTB, an interest income of up to Rs. 50,000  from a senior citizen fixed deposit is exempt from income tax. The FD can be with post offices, banks or cooperative banks.  Beyond this, a TDS of 10% will be deducted. Senior Citizens need to submit Form 15-H to the bank to prevent the deduction of TDS and avoid the hassle of getting an ITR refund. Section 80 TTB is separate from tax exemptions under section 80C. Under Section 80C, you can claim a tax deduction of upto INR 1.5 lacs if you invest in FD having a minimum maturity period of 5 years. These tax-saver FDs have a minimum maturity period of 5 years. The returns on this FD, however, are taxable.
  • Premature Withdrawals: Usually, banks provide a premature withdrawal facility on FDs. In an emergency situation, you have the facility to withdraw the money from your FD before maturity. However, quite often, there is a penalty charged by banks for premature withdrawal. Many banks nowadays do not levy any liability on their senior citizen customers for early withdrawal. This premature withdrawal facility is not available if you invest in non-callable fixed deposits.
  • Loan against FD: FDs can be used to apply for a loan. While the loan amount can go up to 90-95% of the FD, it generally varies from bank to bank.
  • Nomination: While depositing money in an FD, nominating someone as the deposit’s custodian is a mandatory practice. Especially in the event of your death, having a nominee enables the money in your FD to reach your dependents hassle-free.
  • Automatic Renewals: While booking an FD, one can opt for the auto-renewal clause. The bank automatically renews your deposit for the same interest rate and period per the clause.

Benefits of Investing in a Senior Citizen FD

Fixed risk-free returns: Investing in an FD ensures guaranteed compounded returns, which are pretty high at senior citizen fixed deposit rates.

  1. Tax Savings: As discussed above, sections 80TTB and 80C of the Income Tax Act 1961 ensure considerable tax savings for senior citizens who invest in FDs. Also, the process of reducing the hassle of ITR filing has been reduced for older investors.
  2. Easy Collateral for Loan: It is simple to obtain a loan against an FD, usually at no processing fee.
  3. Minimal Risk: FDs come with a predetermined interest rate. They are not market-linked instruments, and the return on them is fixed. As a result, they are nearly risk-free. Further, the DICGC insures a FD’s principal and interest upto a maximum amount of INR 5 lakhs.
  4. Easy to open: Opening a FD account is a simple, hassle-free process. Especially if the KYC with the bank is already done, you can book an FD online in a matter of a few clicks. Otherwise, very few simple documents are required to open an FD offline. Benefits of Investing in a Senior Citizen FD
  5. Fixed risk-free returns: Investing in an FD ensures guaranteed compounded returns, which are pretty high at senior citizen fixed deposit rates.

Eligibility for Senior Citizen FD

The minimum senior citizen age for banks is 60 years. Also, some banks offer additional interest rates for super senior citizens aged 80 and above.

Some banks may also offer you senior citizen FD rates if you are above 55 years of age and have taken voluntary retirement.

Documents Required for Opening Senior Citizen FD Account

If you want to open a senior citizen fixed deposit account with a bank where you already have a savings account, you can log in to net banking/mobile banking and book an FD.

You must take an ID and address proof to the bank branch office if you aren’t a bank customer. The documents acceptable as proof are as follows:

 

Identity Proof

  • Senior citizen ID card
  • Passport
  • PAN card
  • Voter ID card

 

Address Proof

  • Passport
  • Telephone bill
  • Electricity bill
  • Certificate/ ID card issued by Post office

Please note that these documents may vary in every financial institution.

If you want to open an FD account with a post office, you will need to fill out the relevant FD opening form at the post office. In this case, the deposit is made by cheque or demand draft.

Closing Thoughts

FDs are an ideal investment choice for a person looking to live a relaxed life without continuously checking market indicators and worrying about returns. They offer nearly risk-free and guaranteed returns, thus ensuring a stable monthly income. The benefits become all the more attractive with preferentially high senior citizen FD rates. You must understand your requirements of tenure and auto-renewal and select the banks providing the highest FD rates for senior citizens to secure a safe retirement income.

FAQs

Do senior citizens have to pay TDS for fixed deposits?

Senior citizens are exempt from paying taxes on FD interest income of up to Rs. 50,000. They must submit form 15-H to the bank at the beginning of the financial year to prevent TDS deduction and having to claim ITR refunds later. Beyond this limit, banks charge a TDS of 10% on the FD interest income of senior citizens.

Can a senior citizen open a fixed deposit account jointly with a person who is not a senior citizen?

Yes. A senior citizen can open a joint FD account with another person who isn’t a senior citizen. However, if it is a special senior citizen scheme, the primary account holder must be the senior citizen.

Do bulk fixed deposits have an additional interest rate for senior citizens?

Fixed deposits for more than two crores are called bulk fixed deposits. They do not usually have preferential interest rates for senior citizen FDs. But it could vary from bank to bank.

Are super-senior citizens offered an additional rate of interest for fixed deposits?

Yes. Many banks offer an additional interest rate over and above the higher senior citizen fixed deposit interest rates for super senior citizens aged 80 and above.

Do senior citizen FDs have a higher interest rate?

Yes. Senior citizens in India receive an additional interest rate of 0.25% to 0.65%  on FD investments.

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