Top Senior Citizen Bank Fixed Deposits: Bank fixed deposits are the go-to savings option for risk averse investors. Most banks offer a higher interest rate on bank fixed deposits to senior citizens.
Senior citizens can usually benefit from an additional 0.50 percent interest rate on top of the regular rates provided by most banks for fixed deposits with varying tenures. The interest earned from these deposits is paid out to investors at fixed intervals, such as monthly, quarterly, semi-annually, or annually.
Top 5 Senior Citizen Bank FDs:
So which are the top bank fixed deposits for senior citizens? Which banks offer the highest interest rates on bank FDs for senior citizens? We take a look at the top 5 senior citizen bank fixed deposits as listed by ET Intelligence Group:
| Tenure: 1 YEAR | ||
| Bank | Interest Rate (%) Compounded Quarterly | What Rs 10,000 Will Grow Into |
| IndusInd Bank | 8.25 | 10,851 |
| RBL Bank | 8 | 10,824 |
| Bandhan Bank | 7.75 | 10,798 |
| Yes Bank | 7.75 | 10,798 |
| DCB Bank | 7.6 | 10,782 |
| TENURE: 2 YEARS | ||
| RBL Bank | 8.5 | 11,832 |
| IndusInd Bank | 8.25 | 11,774 |
| DCB Bank | 8 | 11,717 |
| IDFC First Bank | 8 | 11,717 |
| Bandhan Bank | 7.75 | 11,659 |
| TENURE: 3 YEARS | ||
| DCB Bank | 8.05 | 12,701 |
| RBL Bank | 8 | 12,682 |
| Yes Bank | 8 | 12,682 |
| Bandhan Bank | 7.75 | 12,589 |
| IndusInd Bank | 7.75 | 12,589 |
| TENURE: 5 YEARS | ||
| Yes Bank | 8 | 14,859 |
| DCB Bank | 7.9 | 14,787 |
| Axis Bank | 7.75 | 14,678 |
| Dhanlaxmi Bank | 7.75 | 14,678 |
| IndusInd Bank | 7.75 | 14,678 |
Source: ET Intelligence Group
Unlike Senior Citizen Savings Scheme and Post Office Monthly Income Scheme, bank FDs offer greater flexibility in terms of tenure. Investors can spread their funds across different maturities using a ‘laddering technique’ instead of locking them in for a specific period, says an ET report.
This approach ensures liquidity and helps manage ‘reinvestment risk’. As the shortest-term FD matures, it can be reinvested for the longest duration, and this process can be repeated with other maturing FDs. It’s crucial to ensure that regular income needs are met and that deposits are distributed across various maturities and institutions.
Investing in a five-year tax-saving bank fixed deposit can help save tax, as it qualifies for Section 80C tax benefits. However, this type of deposit comes with a mandatory five-year lock-in period, and early withdrawal is not permitted. While the interest income is taxable, the amount of tax saved in the year of investment compensates for this.
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