As of January 1, 2024, senior citizens have a variety of options for fixed deposit (FD) investments across leading banks and financial institutions in India. These institutions offer interest rates ranging from 2.50% to 9.50% per annum on FDs with tenures ranging from 7 days to 10 years. Senior citizens typically receive an additional interest rate of 50 basis points (bps) over regular FD rates, provided they are resident depositors.
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Additional Benefits
Some banks and non-banking financial companies (NBFCs) go beyond the standard offerings, providing an extra 20-30 bps on senior citizen FD rates through special schemes tailored for specific tenures.
Highest Rates Available
Private sector banks like SBM Bank, RBL Bank, Bandhan Bank, and IndusInd Bank, along with small finance banks such as AU Small Finance Bank, Jana Small Finance Bank, Suryoday Small Finance Bank, and Ujjivan Small Finance Bank, offer the most competitive rates, starting from 7.00% per annum and going above for senior citizen depositors.
Important Considerations
- Tax Implications: Interest earned on FDs exceeding Rs. 50,000 annually is taxable, and TDS applies unless Form 15G/15H is submitted.
- Premature Closure: Accounts can be closed prematurely with varying penalty rates depending on the tenure and time of closure.
- Extension Options: FD accounts can be extended for additional periods, with interest rates determined at the time of maturity extension.
Below are the indicative FD rates for senior citizens across different tenures at select banks:
Axis Bank:
Highest slab: 7.85% p.a.
1-year tenure: 7.20% p.a.
3-years tenure: 7.60% p.a.
5-years tenure: 7.75% p.a.
If you will invest Rs 50,000 then in 5 years your return will be Rs 73,392
Bandhan Bank:
Highest slab: 8.35% p.a.
1-year tenure: 8.35% p.a.
3-years tenure: 7.75% p.a.
5-years tenure: 6.60% p.a.
If you will invest Rs 50,000 then in 5 years your return will be Rs 69,361
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HDFC Bank:
Highest slab: 7.75% p.a.
1-year tenure: 7.10% p.a.
3-years tenure: 7.65% p.a.
5-years tenure: 7.70% p.a.
If you will invest Rs 50,000 then in 5 years your return will be Rs 73,212
ICICI Bank:
Highest slab: 7.75% p.a.
1-year tenure: 7.20% p.a.
3-years tenure: 7.50% p.a.
5-years tenure: 7.50% p.a.
If you will invest Rs 50,000 then in 5 years your return will be Rs 72,497
IDBI Bank:
Highest slab: 7.75% p.a.
1-year tenure: 7.30% p.a.
3-years tenure: 7.00% p.a.
5-years tenure: 7.00% p.a.
If you will invest Rs 50,000 then in 5 years your return will be Rs 70,739
These rates are indicative and subject to change. It’s always advisable to check with the respective banks for the latest updates and terms.
With varying interest rates and terms, senior citizens can choose FD options that best suit their financial goals and retirement planning needs. It is advisable to consider factors like tenure flexibility, penalty implications, and tax efficiency when making investment decisions in fixed deposits.
