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Benefits of FD for Senior Citizens
There are a multitude of benefits that can be gained from opening senior citizen fixed deposits, chief among which are:
- They offer special interest rates which tend to be higher, thereby resulting in more earnings.
- It creates a safe space for the money to grow in at a steady pace.
- The interest earned on these deposits can be turned into monthly incomes thus providing more peace in your retirement years.
- The senior citizen fixed deposit can also be a tax saver deposit which help get tax deductions under section 80C of the IT Act.
- Senior citizens can choose different interest payout options where interest is credited to the depositors savings account on a frequent basis - either monthly, quarterly, half-yearly or yearly.
- Regular interest payout option can be a boon for those who are retired because it acts as a source of supplementary income.
Senior Citizen FD Interest Rates
Below are the 12 Best Senior Citizens Fixed Deposit rates offered by banks in India as of October 2023.
Bank Name | Up to 5 years | Above 5 years |
IDFC First Bank | 4.00% to8.00% | 7.50% |
Repco Bank | 4.25% to7.55% | - |
Tamilnad Mercantile Bank | 5.25% to 7.75% | 7.00% |
DCB Bank | 4.25% to 8.50% | 8.15% |
Lakshmi Vilas Bank | 2.50% to 7.00% | 6.75% |
Yes Bank | 3.75% to 8.25% | 7.75% |
Deutsche Bank | 3.00% to 7.75% | - |
Karur Vysya Bank | 6.65% to7.70% | 6.65% |
Bandhan Bank | 3.75% to 8.35% | 6.60% |
IDBI | 3.00% to6.80% | 6.25% |
IndusInd Bank | 4.00% to 8.25% | 7.50% |
*Note: Interest rates are subject to change and can be revised by the bank without prior notice.
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Top Bank Senior Citizen FD Rates
Bank Name | Less than 1 year | 1 year to 5 years | More than 5 years |
SBI | 3.50% p.a. to 6.25% p.a. | 7.25% p.a. to 6.75% p.a. | 7.25% p.a. |
HDFC Bank | 3.50% p.a. to 6.50% p.a. | 7.10% p.a. to 7.70% p.a. | 7.75% p.a. |
Canara Bank | 3.25% p.a.to 5.50% p.a. | 6.75% p.a. to 6.50% p.a. | 6.50% p.a. |
Punjab National Bank | 4.00% p.a. to 6.00% p.a. | 6.80% p.a. to 7.00% p.a. | 7.30% p.a. |
HSBC Bank | 3.35% p.a. to 3.60% p.a. | 3.60% p.a. to 7.50% p.a. | - |
*Note: Interest rates are subject to change and can be revised by the bank without prior notice.
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Eligibility for Senior Citizen FD
If you want to open a senior citizen fixed deposit, then you will need to be a resident of India. NRI senior citizens too can open these FDs through NRE or NRO accounts. You also need to be above the age of 60 years at the time of opening the fixed deposit.
- The depositor must have crossed 60 years of age on the date on which he/she opens the respective term deposit account
- Some banks may allow customers who are more than 55 years and have taken early retirement to apply for this type of FD scheme. This rule may vary from bank to bank and are subject to certain terms and conditions
Documents required for opening Senior Citizen FD
- Age proof document
- Passport
- Aadhaar Card
- PAN card
- Photograph
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Features of Senior Citizen Fixed Deposit
The features of the senior citizen fixed deposits remain the same as regular term deposits. Some of these features are listed below.
- These fixed deposits also offer deposit tenures ranging from 7 days to 10 years depending on the bank.
- Nomination facilities are also available on these deposits where depositors can declare a person
- The interest rates offered under these schemes are decided based on the duration of the term deposit.
- The interest earned is compounded on a quarterly basis and can be credited to an account or added to the maturity value of the FD.
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- Once created, the fixed deposit can be closed prematurely at any time. Such a premature withdrawal is not possible with tax saver FDs and may attract penalties with regular FD based on the bank's rules.
- The limits for the amounts that can be deposited under these schemes can range from Rs. 1 crore to higher amounts. These limits will be decided by banks and may vary from one bank to the next.
- Some of these deposits can even be tax saver fixed deposits which come with lock in periods of 5 years and still offer the special interest rates to senior.
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Taxes on Senior Citizen FDs
The interest earned on senior citizen fixed deposits may be liable for income tax based on the applicable laws. These taxes, if any, are deducted at the source however, in case you are not liable to pay taxes you can submit forms 15G or 15H to the banks.
If the term deposit is an NRE deposit then it may not be liable for taxes however in the case of NRO and FCNR deposits interest earned may be liable for taxes.
Benefits of FD for Senior Citizens
There are a multitude of benefits that can be gained from opening senior citizen fixed deposits, chief among which are:
- They offer special interest rates which tend to be higher, thereby resulting in more earnings.
- It creates a safe space for the money to grow in at a steady pace.
- The interest earned on these deposits can be turned into monthly incomes thus providing more peace in your retirement years.
- The senior citizen fixed deposit can also be a tax saver deposit which help get tax deductions under section 80C of the IT Act.
- Senior citizens can choose different interest payout options where interest is credited to the depositors savings account on a frequent basis - either monthly, quarterly, half-yearly or yearly.
- Regular interest payout option can be a boon for those who are retired because it acts as a source of supplementary income
Yes, a senior citizen can open a joint fixed deposit account with an individual who is not a senior citizen. However, if it is a special senior citizen fixed deposit scheme, then the first or primary account holder should be the senior citizen.
As a senior citizen, you will have to pay TDS (Tax Deducted at Source) only when the combined interest for all the fixed deposits you hold in a specific customer ID with the bank exceeds Rs.50,000 in a financial year.
This would depend on the financial institution, but mostly, bulk deposits (above Rs.2 crore or less, depending on the bank) do not have preferential or additional rate of interest for senior citizens.
Yes, each time a fixed deposit account is opened, proof of age has to be furnished and submitted to the bank.
Depending on the bank or NBFC, super-senior citizens (those who are above 80 years of age) are provided with additional interest rates over and above that which is provided to senior citizens (from the age of 60 to 80).
