Senior citizen fixed deposits usually offer better interest rates than standard fixed deposits. This makes them a great choice for retirees or anyone looking for a reliable income source during their retirement years.
Fixed deposits (FDs) have been a go-to investment choice in India for quite some time, particularly among senior citizens who prioritize financial stability and a consistent income. To meet the needs of this age group, Senior Citizen FDs provide better interest rates along with a range of other benefits.
Before you jump into these investment options, however, it’s important to grasp the essential details and factors to maximize their potential.
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What Are Senior Citizens FDs?
Senior Citizens FDs are specialized fixed deposit accounts that banks and financial institutions offer exclusively to individuals aged 60 and above. These deposits generally come with higher interest rates compared to regular FDs, making them an appealing choice for retirees or anyone looking for reliable income during their golden years.
Key Benefits
Higher Interest Rates:
Senior Citizens FDs typically offer interest rates that are higher than standard fixed deposits by 0.25% to 0.75%. This added benefit can significantly enhance income over time, particularly for those who depend on these funds for financial support.
Stable Returns:
Fixed Deposits (FDs) are celebrated for their reliability, delivering consistent returns that cater well to the needs of conservative investors, especially seniors.
Regular Income:
Many seniors count on the interest from their FDs as an essential source of income during retirement. These interest payments can be scheduled monthly, quarterly, semi-annually, or annually, providing the flexibility to align with individual financial circumstances.
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Tax Benefits
Under Section 80TTB of the Income Tax Act, senior citizens can take advantage of a deduction on the interest earned from deposits in banks, cooperative banks, and post offices. This helps ease the tax burden for retirees.
Senior Citizens Fixed Deposits offer a strong option for retirees and older investors looking for reliable income and potential capital growth. By taking into account important factors like interest rates, tax implications, investment terms, and diversification strategies, seniors can fine-tune their FD investments to align with their financial objectives while managing risks effectively.
Additionally, combining FDs with various investment avenues can enhance overall portfolio returns. The table below compares interest rates and corresponding tenures for senior citizen FDs, assisting in making informed decisions tailored to personal financial goals and requirements.
| Senior Citizen Fixed Deposit Table | |||||||
| Bank Name | Interest Rates (p.a.) | ||||||
| Highest slab | 1-year tenure (%) | 3-year tenure (%) | 5-year tenure (%) | 10-year tenure (%) | |||
| % | Tenure | ||||||
| SMALL FINANCE BANKS | |||||||
| AU Small Finance Bank | 8.50 | 18 months | 7.75 | 8.00 | 7.75 | 7.75 | |
| Equitas Small Finance Bank | 9.00 | 888 days | 8.60 | 8.50 | 7.75 | 7.75 | |
| ESAF Small Finance Bank | 8.88 | 888 days | 6.50 | 7.25 | 6.75 | 6.75 | |
| Jana Small Finance Bank | 8.75 | 1 year to 3 years | 8.75 | 8.75 | 8.20 | 7.00 | |
| NorthEast Small Finance Bank | 9.00 | 18 months 1 day to 36 months | 7.50 | 9.00 | 8.50 | 6.75 | |
| Suryoday Small Finance Bank | 9.10 | 5 years | 8.75 | 8.75 | 9.10 | 7.75 | |
| Ujjivan Small Finance Bank | 8.75 | 18 months | 8.60 | 7.70 | 7.70 | 7.00 | |
| Unity Small Finance Bank | 9.10 | 1001 days | 7.75 | 8.65 | 8.65 | 7.50 | |
| Utkarsh Small Finance Bank | 9.10 | 2 years to 3 years; 1500 days | 8.60 | 9.10 | 8.35 | 7.85 | |
| PRIVATE SECTOR BANKS | |||||||
| Axis Bank | 7.75 | 15 months to less than 2 years; 5 years to 10 years | 7.20 | 7.60 | 7.75 | 7.75 | |
| Bandhan Bank | 8.55 | 1 year | 8.55 | 7.75 | 6.60 | 6.60 | |
| City Union Bank | 8.00 | 333 days | 7.25 | 6.75 | 6.50 | 6.50 | |
| CSB Bank | 8.00 | 501 days | 5.50 | 6.25 | 6.25 | 6.50 | |
| DBS Bank | 8.00 | 376 days to 540 days | 7.50 | 7.00 | 7.00 | 7.00 | |
| DCB Bank | 8.50 | 15 months to less than 16 months | 7.60 | 8.00 | 7.90 | 7.75 | |
| Federal Bank | 8.00 | 444 days | 7.50 | 7.60 | 7.60 | 7.10 | |
| HDFC Bank | 7.90 | 4 year 7 months (55 months) | 7.10 | 7.50 | 7.50 | 7.50 | |
| ICICI Bank | 7.85 | 15 months to less than 18 months | 7.20 | 7.50 | 7.50 | 7.40 | |
| IDFC FIRST Bank | 8.40 | 400 days to 500 days | 7.00 | 7.30 | 7.25 | 7.00 | |
| IndusInd Bank | 8.25 | 1 year to 2 years | 8.25 | 7.75 | 7.75 | 7.50 | |
| Jammu & Kashmir Bank | 7.80 | 888 days | 7.50 | 7.25 | 7.00 | 7.00 | |
| Karur Vysya Bank | 8.10 | 760 days – Special Deposit | 7.40 | 7.40 | 7.40 | 6.65 | |
| Karnataka Bank | 8.00 | 401 days | 7.75 | 7.00 | 7.00 | 6.30 | |
| Kotak Mahindra Bank | 7.90 | 390 days to less than 23 months | 7.60 | 7.60 | 6.70 | 6.70 | |
| RBL Bank | 8.50 | 500 days | 8.00 | 8.00 | 7.60 | 7.50 | |
| SBM Bank India | 8.75 | Above 18 months to less than 2 years 3 days | 7.55 | 7.80 | 8.25 | 7.90 | |
| South Indian Bank | 7.90 | 1 year 7 days; 18 months | 7.30 | 7.20 | 6.50 | 6.50 | |
| Tamilnad Mercantile Bank | 8.10 | 300 days (TMB300) | 7.50 | 7.00 | 7.00 | 7.00 | |
| YES Bank | 8.50 | 18 months | 8.25 | 8.00 | 8.00 | 7.75 | |
| PUBLIC SECTOR BANKS | |||||||
| Bank of Baroda | 7.80 | 400 days – Bob Utsav | 7.35 | 7.65 | 7.40 | 7.50 | |
| Bank of India | 7.80 | 400 days | 7.30 | 7.25 | 6.75 | 6.75 | |
| Bank of Maharashtra | 7.95 | 366 days | 7.25 | 7.00 | 7.00 | 7.00 | |
| Canara Bank | 7.90 | 3 years to less than 5 years | 7.35 | 7.90 | 7.20 | 7.20 | |
| Central Bank of India | 8.00 | 1111; 3333 days | 7.35 | 7.50 | 7.25 | 7.25 | |
| Indian Bank | 7.80 | 400 days – IND SUPER | 6.60 | 6.75 | 6.75 | 6.85 | |
| Indian Overseas Bank | 7.80 | 444 days | 7.60 | 7.00 | 7.00 | 7.00 | |
| Punjab National Bank | 7.75 | 400 days | 7.30 | 7.50 | 7.00 | 7.30 | |
| Punjab & Sind Bank | 7.95 | 555 days | 6.80 | 6.50 | 6.50 | 6.75 | |
| State Bank of India | 7.75 | 444 days – Amrit Vrishti | 7.30 | 7.25 | 7.50 | 7.50 | |
| Union Bank of India | 7.80 | 456 days | 7.30 | 7.20 | 7.00 | 7.00 | |
| FOREIGN BANKS | |||||||
| Deutsche Bank | 8.00 | Above 1 year to 3 years | 7.00 | 8.00 | 7.50 | — | |
| HSBC Bank | 8.00 | 601 to 699 days | 4.50 | 7.50 | 6.50 | — | |
| Standard Chartered Bank | 8.00 | 1 year to 375 days | 8.00 | 7.60 | 7.25 | — | |
| Source: Paisabazaar.com | |||||||
| Interest rates as of 12th March 2025 | |||||||
