Senior Citizen FD Interest Rates 2024

Fixed Deposits are one of the most preferred forms of investment as it's a safe option that offers guaranteed returns. Senior citizens have the privilege to earn a slightly higher interest rate than general citizens with Senior Citizen Fixed deposit schemes. However, the FD interest rates for senior citizens varies depending on many other factors and tenure is one of the most important parameters.

Senior Citizen Fixed Deposit Scheme - Important Highlights

The table below shows the important details regarding the Senior Citizen Fixed Deposit scheme:

Senior Citizen FD Scheme 

Minimum and maximum investment amount

The minimum deposit amount required to be invested in a senior citizen FD varies from bank to bank. 

Tenure

It usually ranges from 7 days and a maximum of 10 years. You can choose the tenure within this range according to your needs.

Premature withdrawals

FDs normally provide the facility of premature withdrawal which can act as an emergency fund. However, banks levy a penalty on premature withdrawal of FD which differs from bank to bank.

Loan against FD

FD can be used as collateral to obtain a loan. The maximum loan sanctioned depends on the principal amount. 

Nomination facility

While opening an FD, you must mention the nominee so that those dependent on you don’t face any difficulties while claiming the money. The depositor needs to fill a separate form while giving nomination, known as Form DA1.

Automatic renewals

Banks also offer the facility of automatic renewals at the time of maturity if no instructions are mentioned at the time of opening of the account. The tenure will be the same as the existing FD account.

Key Features of Senior Citizen Fixed Deposit Schemes

The features of senior citizen fixed deposit schemes offered by various banks are listed below:- 

  • Tenure for Senior citizen fixed deposit ranges from 7 days to a maximum of 10 years
  • An additional FD rate is applicable in most of the schemes (usually ranging from 0.25% to 0.65%)
  • Banks usually calculate interest on quarterly compounding bases, however, some banks may also offer monthly, annual or semi-annual basis
  • FD booked for a 5-year period qualifies as tax saving, i.e. investors can claim 80C deductions for up to Rs. 1.5 lakh
  • Bulk deposits are also available under these schemes that usually start from Rs. 2 crores. However, bulk deposits may not provide preferential rates

Senior Citizen Fixed Deposit Rates 2024

The table below shows the latest FD interest rates for senior citizens. It includes the best interest rates for senior citizens offered by top banks in India based on the tenure.

Top Banks 1 year - less than 2 years 2 years - less than 3 years 3 years - less than 5 years 5 years - upto 10 years
SBI 7.30% 7.25% 7% 6.50%
Punjab National Bank 7.60% 7.80% 7.30% 7.30%
HDFC 7.10% 7.65% 7.50% 7.75%
Post Office 6.90% 7.00% 7% 7.50%
Axis Bank 7.60% 7.60% 7.60% 7.75%
ICICI Bank 7.65% 7.50% 7.50% 7.50%
Bank of Baroda 7.35% 7.75% 7.15% 7.50%
Canara Bank 7.35% 7.35% 7.30% 7.20%
Bank of India 7.00% 7.25% 7% 6.50%
Union Bank of India 7.25% 7.00% 7.00% 7.00%
Central Bank of India 7.25% 7.50% 7.00% 6.75%
Yes Bank 6.85% 8.25% 8% 7.75%
Bandhan Bank 7.75% 7.75% 7.75% 6.60%
IDFC Bank 8.00% 7.75% 7.50% 7.50%
Indian Overseas Bank 7.20% 7.30% 7% 7%
Indian Bank 6.80% 7.20% 6.75% 6.60%
Indusind Bank 8.25% 8.00% 8.00% 8.00%
IDBI Bank 7.30% 7.00% 7% 6.75%
Kotak Mahindra Bank 7.70% 7.65% 7.60% 6.70%
Karur Vysya Bank 7.40% 7.40% 7% 6.65%

Taxation under Senior Citizen Fixed Deposit Scheme

According to section 80TTB of the Income Tax Act, Senior citizens are allowed to claim deduction of up to Rs 50,000 on interest income earned from these entities (cumulative) as a deduction from gross total income before the levy of tax.

  • Interest Income from bank savings and fixed deposits
  • Interest earned on post office deposits
  • Interest earned on deposits that are with a cooperative society which is engaged in the business of banking . This includes a cooperative land mortgage and land development bank. 
  • Also, no TDS will be deducted from the interest payments made up to Rs 50,000 in one financial year. To avoid the deduction of TDS, a senior citizen can submit Form-15H to the bank.

Benefits of FD for Senior Citizens

Here are the major benefits of investing in senior citizen fixed deposit scheme:

  • Low Risk

FD for senior citizens is considered to be most reliable and secure form of investment. Also, the shift in market conditions has no impact on the returns on FDs.

  • Guaranteed Returns and Maximum Security

A fixed deposit is a good investment choice for senior citizens because it is not market-linked and is therefore unaffected by market fluctuations. The FD interest rates remain constant over the course of the tenor, so you are aware of what to anticipate from your investment.

  • Interest Benefits

Senior citizens can select from a variety of interest payout options in which FD interest for senior citizen is attributed to the depositor's savings account on a regular basis - monthly, quarterly, half-yearly, or yearly.

  • Convert into a Monthly Income

A senior citizen can utilize the interest earned on the fixed deposits as a monthly income which can be used to plan the retirement period smoothly.

How to Open a Senior Citizen FD account?

One can open a Senior Citizen FD account either visiting the bank directly or through online mode. Most banks nowadays also accept online form submissions where individuals can fill the details and submit their FD account opening form online. Senior citizens can also choose how they wish to receive interest payout, i.e., monthly, quarterly, or annually.

To open a senior citizen fixed deposit account through post office, one can visit the post office and fill the relevant FD opening form. The next step is to deposit the investment amount either through cheque or demand draft.

Senior Citizen FD Eligibility

  • Senior citizens who are of or above the age of 60 years are considered eligible for opening a senior citizen FD account.
  • Few banks  also consider super senior citizens as well. These are the individuals who are above 80 years and are offered with extra fixed deposit interest rates as compared to other senior citizens and general citizens.

Documents Required for Senior Citizen FD

  • PAN Card
  • FD account opening application form
  • KYC Documents (Aadhar card/passport/driving license/voter ID)
  • Passport-size photographs
  • Form 15H or self-declaration form

Comparison of FD rates

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