Regardless of the fact that interest rates are down, senior citizens-the conserative investor class want to stick with age-old conventional investment methods, be it post office investment schemes or bank fixed deposits.
Now as some of the private banks have begun to increase FD rates and the monetary policy is just around and there are expectations that the policy rates may be hiked starting early 2022, here we put the best Senior Citizen Fd's tenure wise. Together with the pointers to note when adding FDs to your portfolio.
Top 5 Senior Citizen Bank Fds for 1 year tenure
For a one-year tenure, senior citizens from Fd can secure a maximum of up to 6.5 percent p.a. interest compounded quarterly. Here again Yes Bank, IndusInd Bank and RBL Bank top the chart.
|Bank- Tenure 1 year||Interest rate % compounded qtly|
Top 5 Senior Citizen Bank Fds for 2 year tenure
The highest rate again for the said tenure is maximum 6.5 percent per annum provided by the banks listed in table.
|Bank- Tenure 2 year||Interest rate % compounded qtly|
Top 5 Senior Citizen Bank Fds for 3 year tenure
Here Yes Bank is offering the highest interest rate of 7 percent per annum followed by RBL Bank and IndusInd Bank which offer 6.8 percent and 6.5 percent p.a. interest respectively for a three year FD.
|Bank- Tenure 3 years||Interest rate % compounded qtly|
Top 5 Senior Citizen Bank Fds for 5 year tenure
Here again Yes Bank is topping the chart and offering the highest interest rate of 7 per cent per annum for 5 year FD with the bank. In fact the bank for a FD maintained with the bank for 3 years to less than or equal to 10 years offers the same rate.
|Bank- Tenure 5 years||Interest rate % compounded qtly|
|IDFC First Bank||6.5|
So, as a conclusion we can see Yes Bank is offering the highest FD rate on a tenure of between 3 to 10 years of 7 per annum. While other banks such as the private sector HDFC Bank has also hiked interest rates, the new revised rates are still lower and do not fall under the top 5 FDs for senior citizens.
Other than these Fds that offer a maximum of 7 percent for a tenure of between 3-10 years, senior citizens can also consider other investments such as Post office senior citizen scheme that offers 7.4 percent interest rate, MIS that is a 5-year investment scheme with monthly returns at interest at 6.6 percent.
Important pointers for Senior Citizens with FD investments
Senior citizens in order to avoid TDS on FD interest income need to file Form 15 H at the beginning of every fiscal year with the banks. If they do not do so they can make the claim for the refund only upon filing their income tax returns.
FD interest is fully taxable for individual assesses, nonetheless senior citizens are allowed rebate and they can claim a deduction to the tune of up to Rs. 50000 against the interest realised on savings and FD income in a fiscal year. But this necessarily needs to be shown in the ITR under the head 'income from other sources' and the deduction by senior citizens can be claimed as part of the Section 80TTB by senior citizens.
In case the interest accrual is above Rs. 50,000 for senior citizens in a year then banks are liable to deduct TDS at the rate of 10 percent. This TDS deduction will then be shown in 26 AS.
Though Indian banks have always been bailed out in case of a crisis like we have seen in the latest case of Yes Bank and there is this DICGC which insures all of the deposits including savings, fixed, current, recurring, etc., you can split your FD investment in may be 2 or 3 banks instead of maintaining a large corpus with just bank.