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; all the banks provide this facility to senior citizens. However, the rate of interest also depends on many other factors and tenure is one of the most important parameters, based on which the rate is decided.
Bank |
Senior Citizen FD Rates (minimum to maximum) |
SBI Fixed Deposit |
3.40% - 6.20% |
Axis Bank |
2.50% - 6.50% |
ICICI Bank Fixed Deposit |
3.00% - 6.30% |
HDFC Bank Fixed Deposit |
3.00% - 6.25% |
IDFC First Bank |
3.25% - 4.70% |
Kotak Bank |
3.00% - 5.75% |
ICICI Home Finance |
5.95% - 6.90% |
Citibank |
2.35% - 4.00% |
Indian Overseas Bank |
3.90% - 5.70% |
IDBI Bank |
3.40% - 5.30% |
Bank of Baroda |
3.30% - 5.75% |
Indian Bank |
3.40% - 5.75% |
OBC |
3.50% - 5.80% |
Andhra Bank |
3.00% - 5.60% |
Bank of India |
3.35% - 5.65% |
PNB Housing Finance |
5.75% - 6.85% |
Allahabad Bank |
2.90% - 5.15% |
PNB |
3.50% - 5.75% |
HDFC |
3.00% - 6.25% |
Bank of Maharashtra |
3.25% - 5.40% |
Canara Bank |
2.95% - 6.00% |
Central Bank of India |
3.25% - 5.50% |
Punjab and Sind Bank |
3.00% - 5.80% |
UCO Bank |
3.00% - 5.50% |
Union Bank of India |
3.50% - 6.10% |
United Bank of India |
3.50% - 6.10% |
Lakshmi Vilas Bank |
2.50% - 6.25% |
Equitas Small Finance Bank |
3.50% - 6.00% |
Jana Small Finance Bank |
3.30% - 6.80% |
DHFL |
7.95% - 8.25% |
Karnataka Bank |
3.40% - 6.00% |
DBS Bank |
2.50% - 5.75% |
Jammu And Kashmir Bank |
3.50% - 5.80% |
Ujjivan Small Finance Bank |
3.40% - 6.50% |
Fincare Small Finance Bank |
3.50% - 6.00% |
Karur Vysya Bank |
6.00% - 6.15% |
Yes Bank |
3.75% - 7.25% |
Syndicate Bank |
2.95% - 6.00% |
Standard Chartered Bank |
1.75% - 5.85% |
Dhan Laxmi Bank |
3.25% - 5.50% |
Bajaj Finance |
6.00% - 7.25% |
LIC Housing Finance |
5.40% - 6.25% |
Federal Bank |
3.00% - 6.25% |
AU Small Finance Bank |
4.25% - 7.25% |
Corporation Bank |
3.50% - 6.05% |
IndusInd Bank |
3.25% - 6.50% |
ESAF Small Finance Bank |
4.50% - 5.75% |
RBL Bank |
3.75% - 6.25% |
HSBC Bank |
2.75% - 4.50% |
DCB Bank |
4.85% - 6.75% |
South Indian Bank |
4.00% - 6.00% |
Bandhan Bank |
3.75% - 6.35% |
The features of senior citizen fixed deposit schemes offered by various banks are listed below:-
The minimum deposit amount required to be invested in a senior citizen FD varies from bank to bank.
Banks have a defined minimum and maximum period for which an FD account can be opened with them. It usually ranges from 7 days and a maximum of 10 years. You can choose the tenure within this range according to your needs.
According to section 80TTB of the Income Tax Act, Senior citizens are allowed to claim a 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.
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.
However, some banks do not charge a penalty on premature withdrawals nowadays. Furthermore, some banks also offer FDs without a premature withdrawal facility too.
FD can be used as collateral to obtain a loan. The maximum loan sanctioned depends on the principal amount and is usually a certain percentage of the same. This percentage can again vary across banks.
While opening an FD, it is imperative that you 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.
Nowadays, banks also offer the facility of automatic renewals at the time of maturity. This means that the FD will be renewed automatically upon 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.
The most reliable and secure form of investment is FD for senior citizens. You can invest in other high-risk, market-linked investments like ELSS, mutual funds, SIPs, etc. because the money you have already invested is secure.
By keeping some money in a safe place, you can create a diversified investment portfolio, which will increase your risk tolerance. It is also one of the fixed deposit schemes' USPs. The shift in market conditions has no impact on the returns on FDs.
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.
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.
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.
Opening an FD account in banks is a very easy process. You can either visit the bank directly or open it through online mode. Most banks nowadays also accept online form submissions where individuals can fill in the details and submit their FD account opening form online. The deposit amount is usually debited from the applicant’s preferred savings bank account. Senior citizens can also choose how they wish to receive interest payout. It can be credited monthly, quarterly, or annually.
To open a senior citizen fixed deposit account in a post office, one needs to visit the post office and fill out the relevant FD opening form. The next step is to deposit the investment amount either through cheque or demand draft.
A senior citizen fixed deposit can be opened by a resident of India. However, NRI senior citizens too can open these FDs with the help of NRE or NRO accounts. You also need to be above the age of 60 years at the time of booking the fixed deposit.
Some banks also allow customers who are more than 55 years and have taken early or voluntary retirement to apply for this type of FD scheme. This rule may differ from bank to bank and are subject to certain terms and conditions.