Savings

Top banks giving interest rate more than 9% on FDs for Senior Citizens

13 Nov 2019 5 min read
Savings:  Top banks giving interest rate on FDs for Senior Citizens - Afinoz

Fixed deposits have always been trusted as the most reliable and risk-free investment option, as compared to other investments in equity. It offers assured return in the form of interest income, with the ease of transaction for senior citizens, unlike other market-linked investments.

While the leading banks such as SBI, ICICI, and HDFC Bank don’t offer more than 7.5% interest rates p.a on Fixed Deposits, few smaller players have taken a different route than the usual ones.  They are offering a better rate of interest on Fixed deposit schemes of more than 9% for senior citizens. For all those who would like to capitalize on advantage, and reap the benefits in the upcoming years can consider seizing the opportunity. Double-digit interest rate FD schemes are offered by small players like Mahindra and Mahindra Financial Services, KTDFC Ltd., Hawkins Cookers Ltd., Shriram City Union Finance, etc. 

So, shift your gears and make the move towards a safer and highly stable option of parking your much-valued amount.  

Willing to grab the opportunity to the best of your advantage??: Keep watching the space for more details: 

Here is a list of Banks and NBFC’s offering Fixed Deposit Interest Rates of more than 9% for Senior Citizens: 

Fixed Deposit with Financial Institutions

Effective Yield Applicable (P.A)

Deposit Tenure

FD Schemes

ESAF Small Business Finance

    8.00% - 9.25%

180 days- 727 days

 

Ujjivan Small Finance Bank

8.00% - 9.00%

180 days – 799 days

 

Suryoday Small Finance Bank

8.00% - 9.84%

181 days – 950 days

 

Utkarsh Small Finance Bank

7.50% - 9.50%

211 days – Less than 2 years but more than 455 days

 

Fincare Small Finance Bank

7.50 % - 9.50 %

181 days- 36 months

 

DHFL

8.25% - 9.15%

1 year

 

Hawkins Cookers Ltd.

11.30%

3 years

Hawkins Cookers Fixed Deposit Scheme

Mahindra and Mahindra Financial Services Ltd.

10.32%

5 years

Samrudhi Cumulative Scheme

Shriram City Union Finance

10.77%

5 years

Cumulative Deposit

KTDFC Ltd

10.17%

5 years

KTDFC Fixed Deposit Scheme

IndusInd Bank

7.00% - 8.50%

270 days- Less Than 61 months

 

Bajaj Finserv

7.60%- 8.65%       (Employees and customers of Bajaj Group)

   

Yes Bank

7.50%- 8.24%

46 days – 18 months, 18 days

 

Bandhan Bank

8.15%

18 months- less than a year

 

Sundaram Finance

7.95% - 8.25%

   

Axis Bank

7.25% - 8.10 %

6 months – 10 years

 

Kotak Mahindra Bank 

7.00% - 7.90%

180 days – 2 years

 

Canara Bank

7.20 % - 7.82%

1 year- 555 days

 

The list shared above of financial institutions will fetch a greater sum of return on Fixed Deposit Investments. Now, the bubble is burst, making way for you to make the most of the opportunity to counter the inflation better.

How these schemes are beneficial for Senior Citizens?

The income source of retired individuals becomes limited or NIL, which is why Fixed Deposits are the most preferred option for Senior Citizens to park their lifetime savings. Usually, senior citizens are offered higher interest rates as compared to the general public. The banks and NBFC’s give options to senior citizens to choose either to receive regular interest payouts (non-cumulative option) or to get the return at the time of maturity (cumulative) along with the principal amount. 

By investing their valued savings on Tax Saving Fixed deposit schemes, Senior Citizens can enjoy tax benefits under Section 80C of the Income Tax Act, 1961. Senior Citizens are left with fewer options to claim tax-exemptions, hence Fixed deposit schemes turn out to be the most viable option to get better returns on investments. It helps to reap greater amounts as returns, at the same time getting relaxation as tax-payers. Additionally, they are eligible to claim a deduction of up to Rs.50,000 under Section 80TTB of the IT Act, 1961. This benefit can be claimed by senior citizens from the financial year 2019-20. 

Features and Benefits of Senior Citizen Fixed Deposit Schemes

  • Based on the duration of the term deposit, the interest rates are decided of the FD schemes.
  • There are no such penalties on foreclosure of FD’s. However, the tax-saver may invite such penalties, with regular FD as per the bank’s rules and regulations.
  • There are fewer banks that offer deposit tenures ranging from 7 days to 10 years.
  • A fixed deposit interest rate is compounded on a quarterly basis, which can be credited to an account or added to the maturity value of the FD.
  • For retired people it acts as a piece of good fortune, providing as a supplementary source of income with regular interest payout.
  • The higher rate of interest being offered on FD schemes for senior citizens results in more earnings.
  • The money invested in FD’s grows at a steady pace, with minimal risk as compared to other risky investment options.
  • Retired persons can enjoy their old-age years with complete peace, without keeping a track at the volatility of market scenarios affecting other risky investment options.
  • It acts as a tax-saver option, thereby saving a good amount by claiming tax-deductions under section 80C of the Income Tax Act.
  • Depending on the need, the different available interest payout options help the senior citizens to get interested credited to the depositors' account frequently. It can be either monthly, quarterly, half-yearly or yearly.

Eligibility Criteria for Senior Citizen FD

The applicant willing to open a senior citizen fixed deposit account, should be a resident of India. NRI citizens wishing to avail of the benefits can open these FDs through NRE or NRO accounts. He/She should be above 60 years of age at the time of opening the fixed deposit accounts. Few banks allow individuals to open the account for the FD scheme, who are more than 55 years of age and have taken volunteer retirement. The rules and regulations on those schemes are subject to certain terms and conditions.

Documents required for opening Senior Citizen FD account

  • Aadhar Card
  • PAN Card
  • Age Proof
  • Passport

The minimum and maximum amount to be invested in FD varies from bank to bank. Nowadays, some banks do not levy charges on premature withdrawals, however, it is advisable to check the rules which vary from bank to bank. FDs can also be utilized to avail of a loan, by putting up as collateral. You will be required to clearly assign a nominee to avoid any difficulty for the legal heirs in claiming the amount, in case of unfortunate events.

With the information shared above, we believe investing in FD’s will be your best bet to get the assured sum of amount, during your post-retirement years.