Senior Citizen Fixed Deposit Interest Rate News: The recent RBI decision to keep the repo rate unchanged has allowed more time for senior citizens to book fixed deposits at higher rates.
The recent decision of the Reserve Bank of India to keep the repo rate unchanged has allowed more time for senior citizens and other bank customers to book fixed deposits at higher rates. At present, several banks are providing over 9% interest on FD to senior citizens as well as general customers (see below).
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As the repo rate hike is paused by the central bank, experts say it is a good time to lock fixed deposits (FD) into the best available rates. At the current deposit rates, individuals should lock in FDs at the highest interest slab rate.
FE Money earlier reported that the average interest rates on outstanding rupee deposits with banks have risen for 15 straight months, which is now visible in bank Fixed Deposit rates. For special tenure deposits, several banks are offering interest rates of over 7% and small finance banks are offering even higher interest over 9%. Some non-banking financial companies are also offering interest rates on fixed deposits over 8%.
According to Naveen Kukreja, co-founder and CEO of Paisabazaar, Fixed Deposit rates of banks are still attractive. He told FE after the recent RBI MPC meeting that the central bank is expected to reduce the repo rates after 6-9 months. He suggests depositors should book Fixed Deposits offering higher yields, especially if those yields are offered for longer tenures and match their investment horizons.
Individuals seeking higher fixed deposit rates can consider small finance banks also. These banks are offering over 9% interest on some tenors.
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Banks offering 9% or interest on Fixed Deposit to Senior Citizens
According to BankBazaar, following small finance banks are currently offering up to 9% or more interest on FD to senior citizens.
- Suryoday Small Finance Bank FD: 4.50% to 9.60%
- ESAF Small Finance Bank FD: 4.50% to 9.00%
- Unity Small Finance Bank FD: 4.50% to 9.50%
- Jana Small Finance Bank FD: 4.25% to 9.00%
- Equitas Small Finance Bank FD: 4.00% to 9.00%
- Fincare Small Finance Bank FD: 3.60% to 9.11%
- North East Small Finance Bank FD: 3.75% to 9.25%
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Banks offering over 8% interest on Fixed Deposit to Senior Citizens
According to BankBazaar, following small finance banks are currently offering up to 8% or more interest on FD to senior citizens.
- RBL Bank FD: 4% to 8.3%
- IDFC First Bank FD: 4.00% to 8.00%
- Yes Bank FD: 3.75% to 8.25%
- IndusInd Bank FD: 4.25% to 8.25%
- Bandhan Bank FD: 3.75% to 8.35%
Are Small Finance Banks safe for Fixed Deposit?
Small Finance Banks have been granted the status of scheduled banks by the RBI. Each depositor of small finance banks is eligible for the quasi-sovereign guarantee cover offered through the Depositor Insurance Scheme of RBI’s DICGC.
According to Kukreja, the status of scheduled banks for small finance banks makes them at par with any PSU banks or large private sector in terms of capital protection for deposits of up to Rs 5 lakh.
