Fixed Deposit Features Specially Curated for Senior Citizens

Senior citizens at the edge of retirement, or otherwise, need a fixed income to survive and sustain themselves independently and respectfully.

Fixed deposits are one of the safest forms of investments for those looking for a long-term plan.

The primary reason is that fixed deposit interest rates and returns are not subject to market fluctuations.

For older people, a slightly higher interest rate is offered on fixed deposit investment schemes.

Salient Features of Senior Citizen Fixed Deposits

The minimum and maximum amount of deposit – depends from bank to bank

Tax deduction – can claim a deduction of up to 50,000 on interest income earned. Also, filling up the form-15H can save them from deduction of TDS, tax deducted at source.

Loan against FD – Senior citizens can get a loan on a certain percentage of their principal FD amount at a very low interest rate.

Premature withdrawals – In case of an emergency, you can withdraw the FD amount before its maturity. Also, some banks may not charge any fees for this facility, especially for senior citizens.

Benefits of Fixed Deposits for Senior Citizens

• Senior citizen fixed deposit offers higher interest rates, with better returns as compared to other age groups. The rate is higher by 0.25% to 0.65% over and above the normal course.
• The tenure of the investment can range anywhere from 7 days to 10/20 years.
• For fixed deposit investments with a lock-in period of 5 years, senior citizens can avail of tax benefits under Section 80C of the Income Tax Act.
• The interest is calculated on a quarterly compounding basis. However, some banks may even follow a half-yearly or yearly interest crediting system.
• The highest FD rates of interest are offered to senior citizens. This makes it a highly lucrative investment deal for the older generation to support them during the later stages of their life.

Senior Citizen Eligibility for FD

People of or above the age of 60 are eligible to open an FD under the senior citizen group.

However, some banks have a super senior citizen bracket for individuals above the age of 80 years. They are offered additional interest rate benefits, over and above the other senior and general citizens categories.

How to Open an FD for Senior Citizens

You can open an FD by visiting the bank or online on the bank’s website.

• Fill in the online form.
• Upload the required documents and identity proof along with the application form
• The amount is generally debited from the applicant’s savings account with the bank.
• Senior citizens can choose to get the interest amount either monthly, quarterly, or yearly.

To open an FD with the post office, the senior citizen needs to visit the post office, fill in the form, and deposit the investment amount/money through a cheque or a demand draft.

Final Take

Before booking a senior citizen fixed deposit, check the rates offered by the various financial institutions and banks and choose the one that works out to be most lucrative in terms of interest rates, tax benefits, and other added features too.