Budget 2023 is a hit among senior citizens as the maximum investible amount under Senior Citizen Savings Scheme (SCSS) has been enhanced to Rs 30 lakh from Rs 15 lakh. The investment limit is also enhanced for the Post Office Monthly Income Scheme (POMIS) to Rs 9 lakh, for a single-holder account, from the earlier Rs 4.5 lakh. POMIS scheme is popular among senior citizens due to its monthly income payment option, but non-senior citizens also prefer to invest. Besides this, the finance minister also introduced another scheme, just for women of all ages, called the Mahila Samman Savings Certificate (MSSC). There is already one scheme for senior citizens – the Pradhan Mantri Vaya Vandana Yojana (PMVVY).
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But, senior citizens should invest a part of their savings in FDs which offer liquidity and ensure interest income periodically. The savings are useful to build an emergency corpus. Although bank FD interest is taxable, a lower tax slab for most senior citizens ensures that tax liability is minimal or nil if other income is negligible. Smaller and new private banks now offer rates up to 8.35 percent on three-year FDs for senior citizens, data compiled by BankBazaar shows. Here are the banks offering the highest interest rates on three-year FDs for senior citizens.
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DCB Bank offers 8.35 percent interest on three-year FDs for senior citizens. Among private-sector banks, it offers the best interest rates. A sum of Rs 1 lakh invested grows to Rs 1.28 lakh in three years.
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IndusInd Bank offers 8.25 percent interest on three-year FDs for senior citizens. A sum of Rs 1 lakh invested grows to Rs 1.28 lakh in three years.
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IDFC First Bank offers 8 percent interest on three-year FDs for senior citizens. A sum of Rs 1 lakh invested grows to Rs 1.27 lakh in three years.
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Axis Bank, Bandhan Bank and Yes Bank offer 7.75 percent interest on three-year FDs for senior citizens. A sum of Rs 1 lakh invested grows to Rs 1.26 lakh in three years.
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HDFC Bank, ICICI Bank and RBL Bank offer 7.5 percent interest on three-year FDs for senior citizens. A sum of Rs 1 lakh invested grows to Rs 1.25 lakh in three years
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Karur Vysya Bank offers 7.4 percent interest on three-year FDs for senior citizens. A sum of Rs 1 lakh invested grows to Rs 1.25 lakh in three years.
Smaller private sector banks and new private banks are offering higher interest rates to garner newer deposits. The Deposit Insurance and Credit Guarantee Corporation, a subsidiary of the RBI, guarantees investments in fixed deposits of up to Rs 5 lakh.
The data on FDs is as of January 26, as seen on lenders’ websites. Interest rates are for senior citizens of 60-80 (deposit amount below Rs 1 crore). All listed (BSE) private sector banks are considered for data compilation. Banks for which verifiable data is not available are not considered. For all FDs, quarterly compounding is assumed.
