Senior citizens mostly prefer to be conservative with their investments i.e. are not too keen to take high risk and in the process lap up fixed income instruments that do not erode their capital and also provide a fixed rate of income as interest income precisely. World over because of the inflationary pressure, global central banks have been hiking key policy rate, in India context referred to as repo rate and this eventually serves FD depositors well. This is as with the rising interest rates, return on fixed income securities such as FDs increase. So, as many of the banks have begun to increase their FD rates, here are the top 5 Senior citizen bank FDs for 2 year tenure.
Top 5 Senior Citizen Bank Fixed Deposits For 2 Year Tenure
|Tenure 2 years||Interest rate|
|RBL Bank||7% (w.e.f from Feb 3, 2022)|
|Bandhan Bank||7% (w.e.f from May 4, 2022)|
|IndusInd Bank||7% (w.e.f from Feb 16, 2022)|
|DCB Bank||6.75% (w.e.f from March 7, 2022)|
|IDFC First Bank||6.25%|
|Source-Bank websites data fetched as on May 9, 2022|
Note the interest is compounded quarterly and the simple interest is paid upon the maturity of the term or fixed deposit.
Taxation of senior citizen bank fixed deposit income:
Typically the bank fixed deposit interest income is put under the 'Income from other sources head' when filing a tax return. And for a senior citizen, in case the interest income from all the Fixed deposits with a bank exceeds Rs. 50000 in a year then there is a TDS charged at the rate of 10%. Also, there is a provision under section 80TTB as per which any taxpayer who is a resident senior citizen aged 60 years and more at any time during a fiscal year can claim a specified amount as a deduction from his gross income for that fiscal year. This section has come into being from April 1, 2018. Under the section you can claim deduction of less than Rs. 50000 or a specified income such as bank deposit interest etc.