Senior Citizen Fixed Deposit Rates in India
Most banks and NBFCs offer higher interest rates on FD to their senior citizen investors, i.e., individuals aged 60 years and above. For instance, if an ordinary fixed deposit investor earns an interest of 7%, a senior citizen is guaranteed to receive an interest rate of more than 7%. Depending on the bank’s rate, it can be 7.50% or 7.75%.
Before discussing senior citizen FD rates in India, let’s list their benefits.
Benefits of FD for Senior Citizens
Fixed Deposits are suitable for senior citizens as they are available with added benefits like:
The main advantage is that senior citizens get higher rates than the standard interest rate. Hence, they can earn more in the process.
- Unlike mutual funds or other types of investment, the risk factor in this kind of investment is zero. Thus, it serves as a steady income source during old age.
- Another primary reason senior citizens should invest in fixed deposits is to get an assured rate of return.
- Interest income of up to Rs. 50,000 received by senior citizens is not subject to TDS deduction.
- For senior citizens, interest payout options are flexible. For instance, they can opt for interest income yearly, half-yearly, quarterly, and monthly.
- Individuals’ interest in FDs can be used as a steady monthly income during retirement years.
Senior Citizen FD Interest Rates
In the table below, you will get all details about senior citizen fixed deposit interest rates applicable from April 2022:
| Bank | Senior Citizen FD Rates | Tenure |
| Axis Bank | 2.50% – 6.50% | Up to 10 years |
| IDFC Bank | 3.25% – 4% | 7 to 180 days |
| IndusInd Bank | 3.25% – 7.61% | Up to 10 years |
| Bandhan Bank | 3.00% – 6.35% | Up to 10 years |
| Yes Bank | 3.75% – 7.19% | Up to 10 years |
| Federal Bank | 3.15% – 6.40% | Up to 10 years |
| UCO Bank | 2.80% – 5.80% | Up to 10 years |
| Deutsche Bank | 5.61% – 8.30% | Up to 5 years |
| ICICI Home Finance | 4.80% to 7.25% | Up to 10 years |
| Equitas Small Finance Bank | 3.50% to 6.64% | Up to 10 years |
* Dates as on April 22nd, 2022. Rates are subject to change without prior notice
Top Bank Senior Citizen FD Rates
Down below is a list of all the top banks that offer distinctive interest rates to their senior citizen investors:
| Bank | Senior Citizen FD Rates | Tenure |
| SBI senior citizen FD interest rate | 3.40%-6.40% | 7 days to 10 years |
| Canara Bank senior citizen FD interest rate | 2.93% to 6.40% | 15 days to 10 years |
| PNB Housing Finance senior citizen FD rate | 6.00% to 7.25% | 1 year to 10 years |
| HSBC senior citizen FD interest rate | 2.75% – 4.50% | 7 days to 5 years |
| Bank of Baroda senior citizen FD interest rate | 3.30% – 6.35% | 7 days to 10 years |
*Interest rates are subject to change without any prior notice
Fixed Deposits on Kuvera
With Kuvera, you can choose between multiple Fixed Deposit options from top banks and NBFCs. You are free to select a convenient tenure and rate. The complete process of booking a fixed deposit takes only minutes and you can do this with your primary bank linked to the Kuvera account.
Eligibility Criteria for Senior Citizen FD
Individuals who can fulfill these criteria are eligible for senior citizen FDs:
- They need to be a resident of India. NRIs can also open these accounts but only via NRO or NRE accounts.
- An individual should be 60 years old or above on opening the fixed deposit account.
- If an individual chooses superannuation or is a voluntary retirement scheme and is within 55 to 66 years old, they are eligible.
- Retired defense personnel within the age bracket of 50 to 60 years can apply.
Individuals will start receiving FD retirement benefits within a month of their investment.
Documents Required for Senior Citizen FD
The following documents are required for opening a senior citizen FD:
- Original and a Xerox copy of your Aadhar Card
- PAN Card, both original and a photocopy
- Any official age proof document – original and a Xerox copy
- Passport (if you have one)
- Two self-photographs
Apart from this, individuals should also be aware of the features of senior citizen fixed deposits.
Features of Senior Citizen Fixed Deposit
The following are the features of senior citizen FD accounts:
- Senior citizen fixed deposits usually have 7 days to 20 years.
- Fixed deposit interest rates are generally 0.25% to 0.65% higher than standard fixed deposit interest rates.
- Interest calculations are on a monthly, annual, and semi-annual basis instead of quarterly compounding for senior citizens.
- Senior citizens have the flexibility to invest in tax-saving fixed deposits for a tenure of 5 years.
- Some banks also allow senior citizens to make a bulk deposit of more than Rs. 2 crore.
Depending on the bank that individuals are opting for, these features may vary for senior citizen fixed deposit accounts.
Furthermore, individuals above the age of 60 should be aware of the taxes applicable to senior citizen FDs.
Taxation of Interest Earned on Senior Citizen FDs
As per the existing income tax law, the interest each senior citizen earns on their FDs is subject to income tax. The taxable amount is deductible at the source. However, senior citizens who are not liable to pay these taxes should submit 15G and 15H forms in their respective banks.
In the NRE deposit, taxes are not applicable, but for FCNR and NRO deposits, the interest earned is subject to taxation.
On the other hand, Section 80C of the Income Tax Act, 1961 enables senior citizens to opt for tax-saving FDs. They won’t have to pay any tax for a deposit amount of up to Rs. 1.5 lakh. These FDs come with a 5-year lock-in period. Individuals also cannot make premature withdrawals before the completion of 5 years.
Final Word
To summarise, banks offer senior citizens with an FD account various benefits. For starters, senior citizen FD rates are pretty high. Other added benefits include tax exemption, flexible tenure, and interest earnings frequently. However, the rate of interest offered by the banks might change yearly and without any prior notice from their end.
Frequently Asked Questions
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How to open a senior citizen FD account?
Senior citizens can open their fixed deposits online. All they have to do is fill out and submit the online form to their bank provides them. Next, their FD amount will get deducted from their preferred savings bank accounts.
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Where to find out the best FD options at Kuvera?
Click on select the option, ‘Invest’, and click on, ‘Fixed Deposits’. You will be directed to a page where you can compare FD tenures of various banks – from lesser than one year to greater than 5 years. Options are available to cross-check the interest rate with the minimum deposit required. As of now, Kuvera is offering the best interest rate of 7.20% p.a. by Bajaj Finance Ltd. for a tenure of 3 years, and 8 months.
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Do senior citizen FDs come with a lock-in period of 5 years?
No, senior citizen offers flexibility. Individuals can decide whatever tenure they want. However, opting for a 5-year long FD can be a tax saver and offer high-interest earnings on whatever amount is deposited.
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How can senior citizens increase their monthly income?
As a retired individual, you can opt for fixed deposits to receive a steady monthly flow of income. Fixed deposits are probably the best low-risk investment option.
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Do FDs provide the highest rate of interest?
Yes, in comparison to other deposits, fixed deposits offer the highest interest rate. FD interest rates are higher for senior citizens than the standard interest rates.
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