Banks offering the best FD interest rates for seniors

The phrase “Senior Citizen” refers to any citizen of the country over the age of 60. Usually, a senior’s primary investment goal is to achieve assured returns with the least amount of risk. There are many investment options available for seniors in the market, but the most popular is a fixed deposit. It is one of the most popular financial instruments for seniors to invest their money.

They choose to place a large sum of money in bank FDs because the primary investment amount is deemed safer than stock investments, and the former also offers a guaranteed return in the form of cash income. interests.

Higher interest rate for seniors

Compared to ordinary citizens, senior citizens generally receive higher interest rates. Banks often pay a higher interest rate of 0.50%. Seniors can choose between receiving regular interest payments (non-cumulative option) to cover their needs or receiving the principal amount plus interest at maturity (cumulative option).

FD senior rates – one year seniority

Bank name 1 year Compound return Qly
RBL Bank 6.75 10692.28
Bandhan Bank 6.50 10666.02
DCB Bank 6.50 10666.02
First IDFC Bank 6.50 10666.02
industrial bank 6.50 10666.02

FD senior rates for 2 years

Bank name 2 years Compound return Qly
Bandhan Bank 7.00 11488.82
DCB Bank 7.00 11488.82
industrial bank 7.00 11488.82
RBL Bank 7.00 11488.82
First IDFC Bank 6.50 11376.39

Senior FD rate 3 years of seniority

Bank name 3 years Compound return Qly
DCB Bank 7.10 12350.75
Bandhan Bank 7.00 12314.39
industrial bank 7.00 12314.39
RBL Bank 6.80 12241.97
First IDFC Bank 6.50 12134.08

Senior FD rate 5 years of seniority

Bank name 5 years Compound return Qly
DCB Bank 7.10 14217.47
industrial bank 7.00 14147.78
RBL Bank 6.80 14009.38
First IDFC Bank 6.75 13974.99
Axis Bank 6.50 13804.20

Taxation of seniors

Interest earned on deposits held with banks, co-operative banks or post offices is virtually tax exempt under the recently inserted Section 80TTB of the Income Tax Act. Here is how the tax exemption works: an elderly person can claim a deduction from their total gross pre-tax income of up to Rs 50,000 in interest income generated by these organisations.

In addition, no TDS will be deducted from interest payments up to Rs 50,000 made in a single financial year. A senior can submit Form 15H to the bank to prevent the TDS deduction.

Minimum and maximum investment

The minimum amount needed to invest in a fixed deposit differs depending on the bank. The highest amount you can invest in an FD, on the other hand, is unlimited.

Duration of the fixed deposit

Banks have set a minimum and maximum term for which a fixed income account can be opened. An FD can generally be held for a minimum of 7 days and a maximum of 10 years. Within this range, you have the option of selecting a mandate.

Appointments for DFs

There is also an appointment option for FDs. It is essential to mention the nominee clearly and precisely when creating an FD so that your legal heirs do not have to go through any complications in obtaining the funds. When submitting an application, a separate form known as Form DA1 must be completed.

Documentation for elderly person to open FD

In addition to the correctly completed KYC form, you will need to provide a self-attested copy of an Identity Document (ID) such as a PAN, proof of address such as a voter card, passport, etc. ., and recent color photos.

Bank staff will verify your age using the documentation you provide to qualify to invest in DFs as a senior. In most cases, the bank adopts the Income Tax Act definition of senior.

Auto-renewal option

Automatic renewals are now available from banks when due. This means that if no instructions are given when opening the account, the FD will automatically renew when it reaches its due date. The automatic renewal of a fixed rate deposit is for the same period for which it was initially placed, at the interest rate in effect on the date of the automatic renewal.

Important FAQs according to the HDFC Bank website
1. What documents are needed to open a senior regular term deposit?
When opening the account, the client must provide proof of age establishing that he is a senior. To do so, one of the following can be submitted:

  • Secondary school leaving certificate (10th class)
  • LIC Policy
  • Voter ID card
  • Order for payment of support
  • Birth certificate issued by the competent authority
  • Passport
  • Defense ID/Government ID (provided they have the cardholder’s photo, signature and date of birth)
  • ID cards issued by PSU
  • Senior Citizen Cards issued by Indian Airlines/Indian Railways
  • PAN card

2. Can I open a joint account with a non-senior citizen for Regular Fixed Deposit?
You can, as long as the first account holder is a senior.

3. When does the Bank issue a TDS certificate?
The TDS certificate, Form 16A, for TDS deducted during a calendar quarter, will be issued the following month of the respective quarter.

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