A fixed deposit offers a higher rate of interest than the regular savings account. But Senior Citizen fixed deposit allows individuals above the age of 60 years to get a higher interest rate than the traditional fixed deposits. Senior Citizen fixed deposit is a lucrative option for the senior citizens as they get the maximum returns on their investment. Apart from offering a high senior Citizen FD interest rate, it provides various other benefits.
Features of Senior Citizen Fixed Deposit Investment
While the basic features of senior citizen fixed deposit remain the same as the traditional FD, there are some significant changes which are given below.
- Interest is compounded on a quarterly basis which can either be credited to the account or added to the maturity value of the fixed deposit.
- Depositors can choose from various payment checkout options.
- Senior citizen fixed deposit can be closed prematurely at any time.
Senior Citizen Fixed Deposit comes with nomination facilities. The depositor can nominate their children or spouse for the maturity amount.
Benefits of Senior Citizen Fixed Deposit
There are several advantages of investing in a senior citizen fixed deposit. Some of these are as follows:
- Senior Citizen FD interest rate is higher than the one offered by traditional FDs. This results in more earnings.
- There isn’t any upper limit to the amount invested, and therefore senior citizen fixed deposit can invest their life savings in it.
- Senior citizen FD offers guaranteed returns, thus proving to be a safe and secure investment option.
- Senior citizen fixed deposit creates a safe space for the cash to grow at a steady rate.
- This can be used as a mean of income for senior citizens as the interest earned can be credited to the account and turned into monthly income source for the retired.
- Some deposits can even be tax saver FDs which helps get tax deductions under Section 80C of the IT Act.
Bank FD Interest Rates for Senior Citizens
Senior Citizen Fixed Deposit interest rate depends upon the term. Longer the tenure, higher the interest rate. Given below is the table displaying the interest rates of different terms offered by various banks in India.
Banks | Interest Rate (Annually) | Tenure |
| PNB (Punjab National Bank) | 6.20 – 7.25 Percent | 7 Days to 5 Years |
| SBI (State Bank of India) | 6.25 – 7.25 Percent | 7 Days to 10 Years |
| Axis Bank | 3.50 – 7.75 Percent | 7 Days to 10 Years |
| IndusInd Bank | 4.00 – 8.15 Percent | 7 Days to 61 Months and Above |
| Kotak Mahindra Bank | 4.00 – 7.55 Percent | 7 Days to 10 Years |
| Yes Bank | 5.50 – 8.00 Percent | 7 Days to 10 Years |
| IDFC Bank | 4.50 – 8.25 Percent | 7 Days to 10 Years |
| Citi Bank | 3.50 – 7.50 Percent | 7 Days to 3 Years |
| Standard Chartered Bank | 4.75 – 7.90 Percent | 7 Days to 10 Years |
| DBS Bank | 4.00 – 7.20 Percent | 7 Days to 5 Years and Above |
Please note that Senior Citizen Fixed Deposit interest rate is subject to change without proper notice by the bank.
Some banks allow depositors to invest from 7 days to 10 years with interest rates up to 8.00%. Individuals can deposit amounts even higher than Rs. 1 crore. The bank decides these limits and criteria, but every bank offers a higher rate of interest for senior citizen fixed deposits.
Eligibility for Senior Citizen FD
The eligibility criteria for an individual to be able to open a senior citizen fixed deposit account is as follows:
- Must be above 60 years of age at the time of opening the account (some banks lower this bar to 55 for those who have taken early retirement).
- Must be a resident of India.
- NRIs can also open a senior citizen fixed deposit account through NRE or NRO accounts.
Documents Required for Opening Senior Citizen FD
To open a senior citizen fixed deposit account and enjoy the attractive senior citizen fixed deposit interest rate, one needs the following documents:
- Age proof document
- Aadhaar card
- Photograph
- Passport
- PAN card
Taxes on Senior Citizen FDs
The interest earned on senior citizen fixed deposit may be liable to income tax deductions based on the applicable laws. These taxes are deducted at source. Individuals who are not liable to pay taxes can submit Forms 15H or 15G to the bank. NRE deposits are not liable to any taxes, but the interest earned through NRO and FCNR deposits may be liable to taxes.
Refer to the senior citizen FD calculator to calculate the maturity amount and the interest earned. Using this calculator is easy as it requires the basic parameters such as the principal amount, rate of interest, term, and the frequency of compounding. Use FD calculator to figure out the best bank to invest the money with. This calculator is free of cost and is available online.
Senior citizen fixed deposits are one of the most effective investment options available to the retired and every elderly person. They can invest their lifetime savings in this FD to help them for years to come. Individuals who are about to retire or have crossed 60 years can opt for this investment option to enjoy a financially independent life ahead.