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Senior Citizen FD Interest Rates 2022

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.

Senior Citizen Fixed Deposit Rates 

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%

Key Features of Senior Citizen Fixed Deposit Schemes

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

  • Attractive and higher senior citizen FD interest rates: The interest rates for senior citizens are also offered under these schemes and are decided based on the duration of the term deposit.
  • Guaranteed returns: The returns are always the same irrespective of the inflation or current market scenario
  • Safe and secure investment: As banks are regulated by RBI, your hard-earned money will be safe once you have invested in a senior citizen fixed deposit
  • Periodic interest payout option: As mentioned earlier, one can choose the frequency of the interest payout options from either monthly, quarterly, or yearly.
  • Online booking via net banking: One of the benefits of FDs is the easy account opening process, i.e. online account opening process is also available. If you are a customer of the bank then well and a and even if you are not an existing customer, you can fill the account opening query on a bank’s website and a representative will get back to you.
  • Additional Facilities: Be it senior citizen or any other FD, Premature withdrawal, nomination, loan, and sweep-in facility are provided by all the banks on all the FDs
  • Limit for Deposits: The limits for the FD deposit amount that can be deposited under these schemes can range from Rs. 1 crore to even higher amounts. These limits are decided by banks and may vary from one bank to the next.
  • Some of these deposits can even be tax saver fixed deposits that have a lock-in period of 5 years and still offer the special FD interest rates for senior citizens.

Details about FD for Senior Citizens

Minimum and maximum investment amount

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

Tenure

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.

Taxation

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.

  • Interest Income from bank savings and fixed deposits
  • Interest earned on post office deposits
  • Interest earned on deposits that are with a cooperative society that 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.

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.

However, some banks do not charge a penalty on premature withdrawals nowadays. Furthermore, some banks also offer FDs without a premature withdrawal facility too.

Loan against FD

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.

Nomination facility

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.

Automatic renewals

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.

Benefits of FD for Senior Citizens

  • Low Risk

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.

  • 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.

Access to fixed deposits
of various banks
Invest without opening
a new bank account
Avail high interest rates
of up to 6.5%
OPEN FD ONLINE

How to Open a Senior Citizen FD account?

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.

Senior Citizen FD Eligibility

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.

Comparison of FD rates

Name
Tenure
Highest Interest Rates
1
2
3
4
5

FAQs

Q1. What is the Senior Citizen interest rate offered by post office FD?

Ans. Post Office Fixed Deposit scheme or post office senior citizen savings scheme offers a 7.40% rate of interest with interest payable quarterly.

Q2. How is the taxation done for senior citizens FD?

Ans. If the interest earned in a financial year (1st April to 31st March) exceeds Rs. 50,000, TDS is charged at 10%.

Q3. What are the documents needed to open a Senior Citizen FD account?

Ans. The following list of documents must be produced to successfully book a fixed deposit account in any bank or non-banking financial companies (NBFCs):

  • Photo ID proof (Passport and Voter ID Card, etc.)
  • Age Proof
  • Residence proof (Aadhaar Card, Passport, latest electricity/water bill, etc.)
  • PAN Card (or Form 60 if PAN card is not available)
  • Form 15H

Q4. Which bank provides the maximum senior citizen FD interest rate?

Ans. Currently, the highest senior citizen fixed deposit rate is 9.50% which is offered by Fincare Small Finance Bank.

Q5. Are fixed deposit investments taxable for senior citizens?

Ans. Yes. If the interest earned from an FD in a financial year (1st April to 31st March) exceeds Rs. 50,000, TDS is charged at 10%

Q6. Who is referred to as a senior citizen?

Ans. Any individual who has attained 60 years of age or more is legally termed as a senior citizen.

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