3 Banks Offering Fixed Deposit Interest Rate Of 8% And More To Senior Citizens

Since May this year, 3 repo rate hikes have been implemented by the Reserve Bank of India, which in turn has made deposits more attractive. As it is through the repo rate hike which is being considering to tame inflation, cost of borrowing for lenders go higher, nevertheless it gives them the room to raise interest rate on deposits. So, with consecutive rate hikes, senior citizen class can now expect a decent deposit rate of 8% and higher on bank Fds. Here below are listed the banks that have fine tuned their interest rate on term deposits to 8% and higher.

Unity Small Finance

Founded by the Centrum Group and BharatPe, Unity SFB is the country's first digital bank. On its deposits, the bank offers FD interest rate of between 4-7.65% for tenure ranging from 7 days to 10 years. Senior citizens get the highest rate of 8.15% for Fds maturing in over 2 years to up to 5 years. These rates are effective from July 6, 2022.

"For premature withdrawal of fixed deposit, interest rate payable would be corresponding FD rate minus 1.00% for the tenor for which the deposit has actually run', mentions the website.

Jana Small Finance Bank

The bank's FD rates were last revised on June 15, 2022. Senior citizens on the FD with Jana SFB can get up to 8.15% return per year for FD tenure of over 3 years to less than 5 years. On FD tenure of more than 1 year to up to 3 years and 5 years (1825 days), FD rate is 8.05%.

"In case of early or premature withdrawal of FD, interest will be paid at the applicable rate of interest for the duration which the deposit is maintained with us minus premature withdrawal penal rate as follows:Fixed Deposit less than INR 200 Lakhs -0.5% Fixed Deposits greater than or equal to INR 200 Lakhs -1%", specifies the bank website.

Fincare Small Finance Bank

Effective August 21, 2022, the bank has revised its FD rates and as part of it Senior citizens can now earn 8% p.a. interest on Fds maintained for 1000 days with the bank.

As per the bank website, senior citizen deposit rate shall be applicable only if the Senior citizen is the 'first holder' on the term deposit.

Should senior citizens consider opening Fixed Deposits with Small Finance Bank for higher rates?

As all the parameters and prudential norms similar to commercial banks apply to even small finance banks, they are regulated at par with other banks. Furthermore, regardless of whether it is a large-scale commercial banking entity or Small Finance Bank, all your deposits that include savings account, RD account and Fds are insured under DICGC for up to Rs. 5 lakh per bank per depositor in case the bank fails.

So, senior citizens looking for better returns can book their Fds with SFBs in small quantum.

Advise to investors

We would advise investors to invest for the smaller term  given that there is a possibility of interest rates moving even higher from the current levels. In fact, we do believe that there would be a rise in interest rates of around 25 basis points in the next RBI meet.