Investing in secure financial products is very necessary as one retires from employment or merely ventures into its later years. For senior citizens who have poor or erratic income, fixed deposits tend to be a safe option. Most of the banks and also Non-Banking Financial Companies (NBFCs), offer senior citizens preferential/extra FD rates ranging from 0.25 percent to 1.00 percent usually. Senior citizens, i.e. 60 years or older, are allowed to invest in fixed deposits. Suryodaya Small Finance Bank currently offers the highest senior citizen fixed deposit rate of 7.75 percent over a 5-year term. We've curated a list of the best FD interest rates for elderly people, as well as the documentation needed to open one.
Top Small Finance Bank FD Rates For Senior Citizens
The FD rates mentioned below are of top small finance banks and are valid to deposits below Rs. 2 crore for senior citizens.
|Banks||Tenure||ROI in %|
|Suryoday Small Finance Bank||5 years||7.75%|
|Utkarsh Small Finance Bank||700 days||7.50%|
|Equitas Small Finance Bank||888 days||7.30%|
|Fincare Small Finance Bank||36 months 1 day to 59 months||7.00%|
|Jana Small Finance Bank||Above 2 to 3 years||7.00%|
|Ujjivan Small Finance Bank||1 year - 2 years||7.00%|
Top Private & Public Sector Bank FD Rates For Senior Citizens
The fixed deposit rates for senior citizens listed below are related to deposits of less than Rs. 2 crore.
|Banks||1-year rate||3-year rate||5-year rate|
|IDFC First Bank||5.75%||5.75%||5.75%|
|Bank of Baroda||5.40%||5.60%||5.75%|
|State Bank of India||5.50%||5.80%||6.20%|
Key takeaways of senior citizen FD schemes
The following facts illustrate the characteristics of fixed deposit schemes for senior citizens proposed by different banks:
- Usually, the tenure of senior citizen FD schemes ranges from 7 days to 10 years
- Additional FD rates typically vary from 0.25 per cent to 0.65 per cent provided to senior citizens as opposed to non-senior citizens.
- Most of the banks provide interest on a monthly, annual or semi-annual basis to senior citizens.
- Bulk deposits for senior citizens start at Rs. 2 crore and go up.
- Senior citizens can claim 80C deductions for up to Rs. 1.5 lakh if they invest for a term of 5 years in a fixed deposit.
To effectively open a fixed deposit account at any bank or non-banking financial company, the following list of documents must be kept handy by senior citizens:
- Residence proof: Utility bills of the last 3 months, Aadhaar Card, PAN Card, Voter ID Card
- Identity proof: Passport, Voter ID Card, Aadhaar Card
- PAN Card or Form 60
- Form 15H
- Age proof: Age or date of birth issued by any Government Institution/Agency/Local Body
Most of the banks allow senior citizens who are 60 years of age or higher to open a fixed deposit account. Super senior citizens are also considered by some of the banks. Those are the ones who have passed the 80-year age barrier. They are provided above the rates promised to senior citizens with additional fixed deposit interest rates.
TDS applicable on senior citizen FD schemes
Banks and NBFCs subtract tax from earned interest before crediting it to the depositor's account in the case of fixed deposits. TDS is levied as the interest accrues, i.e. monthly, quarterly, half-yearly or annually, in the case of accumulated interest payments. If received interest crosses Rs. 50,000 for senior citizens, tax is withheld at a rate of 10%, similar to Rs. 40,000 for ordinary citizens.