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    What are Senior Citizen Fixed Deposits

    Fixed deposits are not just an instrument of investment for youngsters; if you are considered a senior citizen, you too can open an FD which is referred to as the senior citizens fixed deposit. They are also used by senior citizens to park their excess money in a safe place where it can earn a decent interest and maybe even provide them with an additional source of income. These deposits are almost the same as the regular fixed deposits and can be opened by anyone who is a resident Indian or an NRI.

    Possibly the main point on which they may differ from regular fixed deposits is on the interest rates because many banks offer special interest rates to senior citizens. Another point on which they may differ from regular fixed deposits would be that to open a senior citizen fixed deposit, you will be required to submit proof of age.

    Eligibility for Senior Citizen FD

    If you want to open a senior citizen fixed deposit then you will need to be a resident of India. NRI senior citizens too can open these FDs through NRE or NRO accounts. You also need to be above the age of 60 years at the time of opening the fixed deposit.

    Features of Senior Citizen Fixed Deposit

    The features of the senior citizen fixed deposits remain the same as those of the regular term deposits. Some of these features are listed below.

    • These fixed deposits also offer deposit tenures ranging from 7 days to 10 years depending on the bank.
    • Nomination facilities are also available on these deposits where depositors can declare a person
    • The interest rates offered under these schemes are decided based on the duration of the term deposit.
    • The interest earned is compounded on a quarterly basis and can be credited to an account or added to the maturity value of the FD.
    • Once created, the fixed deposit can be closed prematurely at any time. Such a premature withdrawal is not possible with tax saver FDs and may attract penalties with regular FD based on the bank's rules.
    • The limits for the amounts that can be deposited under these schemes can range from Rs. 1 crore to higher amounts. These limits will be decided by banks and may vary from one bank to the next.
    • Some of these deposits can even be tax saver fixed deposits which come with lock in periods of 5 years and still offer the special interest rates to senior.

    Senior Citizen Fixed Deposit Interest Rates

    Fixed deposit is not just for youngsters and keeping this in my mind, many banks in India offer special fixed deposit accounts tailor made for senior citizens. Senior citizens can invest their money in the fixed deposit account and earn interest on the same. The amount from the fixed deposit account serves as an additional source of income. The fixed deposit account for senior citizens is very similar to the regular fixed deposit account. The account can be opened by both Indian residents and NRIs. NRI senior citizens can open a FD account through NRE or NRO account. The only factor where the Senior Fixed Deposit account will differ from the regular fixed deposit account is the interest rate as banks offer a higher rate of interest for senior citizens.

    Most banks offer resident senior citizens a special interest rate on their fixed deposits which tend to be up to 0.5% per annum higher than the prescribed rate of interest. However, these special interest rates are subject to certain conditions. These conditions may differ from one bank to another but the general principle remains the same.

    To be able to avail the special interest rates the deposits need to be created for durations in excess of 1 year. Deposits opened for short terms don’t qualify for senior citizen interest rates. In case the deposit is held as a joint fixed deposit, and the secondary holder, not the primary, is a senior citizen, then too the special interest rates will not apply.

    The special interest rate is also not applicable for most banks, if the amount being deposited is in excess for Rs. 1 crore.

    In the case of NRE, NRO and FCNR deposits, most banks don’t offer any special interest rates for senior citizens. The interest rates remain the same for all depositors.

    Interest Rates on Senior Citizen Fixed Deposit Accounts by Banks

    BanksInterest Rate per annum (Below 1 year)Interest Rate per annum (1 to 2 years)Interest Rate per annum (2 to 3 years)Interest Rate per annum (3 to 5 years)Interest Rate per annum (more than 5 years)
    ALLAHABAD BANK4% to 6.5%6.75%6.75%6.50%6.50%
    ANDHRA BANK4.5% to 6.75%7.35%7.00%7.00%7.00%
    AXIS BANK3.5% to 7%7% to 7.50%6.75%6.75%6.75%
    BAJAJ FINSERV-8.05%8.25%8.30%-
    BANDHAN BANK4% to 7.5%7.75%7.40%7.00%7.00%
    BANK OF BARODA4.50% to 6.50%6.90%6.75%6.75%6.50%
    BANK OF INDIA4.5% to 7%7.2%7.15%7.1%7%
    BANK OF MAHARASHTRA4.75% to 6.5%7.00%6.75%6.75%6.50%
    BARCLAYS BANK2% to 5%5.25% to 6.3%6.40%6.40%6.40%
    BHARAT BANK4% to 6%7.5%7.5%7.75%8.1%
    BHARATHIYA MAHILA BANK5.5% to 7.25%7.50%7.50%7.00%7.00%
    CANARA BANK4.7% to 7%7.30% to 7.40%7.30%7.20%7.00%
    CATHOLIC SYRIAN BANK3.5% to 6.25%6.50%6.50%6.50% to 6.75%6.50%
    CENTRAL BANK OF INDIA5.25% to 7%7.1%7%7%7%
    CITIBANK3.5% to 5.75%5.75%5.75%6.25%6.25%
    CITY UNION BANK6.25% to 7%7.1% to 7.5%7.10%7.10%6.95%
    CORPORATION BANK5% to 6.85%7.1%7.1%7%7%
    DARCL8.00%8.50%9.00%9.50%9.50%
    DBS BANK4% to 6.1%6.3% to 6.5%6.5%6.5% to 6.6%6.70%
    DCB BANK4.5% to 7.25%7.45% to 7.55%7.65%7.70%7.65%
    DENA BANK5% to 7.3%7.30%7.30%7.30%7.30%
    DEUTSCHE4% to 6.5%6.90%7.00%7.25% to 7.75%-
    DHANALAKSHMI BANK4% to 6%7.25%7.50%7.00%7.00%
    DHFL BANK-8.50%8.55%8.55%8.75%
    FEDERAL BANK4% to 7.00%7.20% to 7.10%7.00% to 7.50%7.00%7.00%
    GRUH FINANCE LTD-7.25%7.25%7.50%7.50%
    HDFC BANK4% to 6.75%6.75% to 7.45%6.50%6.50%6.50%
    HDFC LTD BANK-8.00%8.00%8.05%8.05%
    HSBC BANK3.65% to 5.5%5.5% to 7%5.50%5.50%-
    HUDCO BANK-9.40%9.25%9% to 9.25%8.75%
    ICICI BANK4.5% to 7.00%7.25%7.00%7.00%7.00%
    ICICI HOME FINANCE-8.00%8.15%8.00%-
    IDBI BANK4.25% to 6.5%7.00% to 7.25%6.75%6.50% to 6.75%6.50%
    IDFC BANK4.5% to 7.5%7.75% to 8.00%7.70%7.70%7.70%
    INDIAN BANK4.5% to 6.75%6.75% to 7%6.75%6.50%6.50%
    INDIAN OVERSEAS BANK4.5% to 6.75%7% to 7.25%6.75%6.50%6.50%
    INDIAN POST OFFICE-6.80%6.90%7.10% to 7.60%-
    INDUSIND BANK4% to 7.25%7.65%7.25 to 7.65%7.25%7.25%
    JAMMU KASHMIR BANK5.5% to 7%7.25%7.25%7%7%
    JANATA SAHAKARI6% to 8.25%8.65%8.65%8.50%8.50%
    JAYPEE GROUP12% to 13.18%14.30%15.57%--
    KARNATAKA BANK4% to 7.4%7.15%7.00%7.00%7.00%
    KARUR VYSYA BANK5% to 6.9%7.25%7.50%7.50%7.50%
    KORES INDIA LTD-9.50%10.25%11.50%-
    KOTAK MAHINDRA BANK4.00% to 7.10%6.9 to 7.10%6.9%6.75%6.50%
    KTDFC-8.75%8.75%8.5% to 8.75%-
    LAKSHMI VILAS BANK4.50% to 6.75%7.50%7.50% to 7.50%7.50%7.50%
    LIC HFL-7.40% to 7.55%7.45% to 7.75%7.60% to 7.75-
    MAHINDRA FINANCE-7.75%7.75% to 7.8%7.80%7.80%
    NAINITAL BANK4.5% to 8%8.40%8.25%8.25%8.00%
    NATIONAL HOUSING BANK-7.35%7.35%7.60%7.60%
    PUNJAB & SIND BANK4% to 6.9%7.30%7.30%7.30%7.30%
    PUNJAB NATIONAL BANK4.75% to 6.75%7.25%7.15%7.15%7%
    PUNJAB NATIONAL HOUSING FINANCE BANK-7.50%7.65%7.65%7.65%
    RBL BANK5.5% to 7.6%7.9% to 8.00%7.85% to 8%7.85%7.85%
    ROYAL BANK OF SCOTLAND3.50% to 4.50%4.00%4.00%4.00%-
    SARASWAT BANK4.25% to 6.50%7.05%7.05%6.95%6.85%
    SHAMRAO VITHAL COOPERATIVE BANK4.75% to 6%7.00%6.75%7.45% to 7.55%7.45%
    SHRIRAM CITY UNION FINANCE LIMITED-8.00%8.42%8.94% to 10.08%-
    SOUTH INDIAN BANK4.5% to 6.5%7.25%7.00%7.00%7.00%
    SRIRAM FINANCE LTD-8% to 8.10%8.25%8.40 to 8.50%8.50%
    SRS LIMITED-12.00%12.25%12.50%-
    STANDARD CHARTERED BANK4.75% to 7%7.25%7%7%7%
    STATE BANK OF INDIA6.% to 7.%7.25%6.75%6.75%6.75%
    SUNDARAM FINANCE-7.50%7.75%7.75%-
    SYNDICATE BANK4.75% to 6.15%7% 7.1%7%7%
    TALBROS AUTOMOTIVE COMPONENTS LTD-9.50%10.25%11.00%-
    TAMILNAD MERCANTILE BANK5% to 7.40%7.50%7.50%7.40%7.40%
    UCO BANK5% to 7%7.25%7.25%7.25%7%
    UNION BANK OF INDIA5.5% to 7.5%7.30 to 7.50%7.30%7.30%7.30%
    UNITED BANK OF INDIA4% to 6.5%6.50% to 6.756.50%6.50%6.50%
    VIJAYA BANK4.5% to 6.75%7.00%6.75%6.75%6.75%
    YES BANK6.25% to 7.5%7.60%7.60%7.60%7.60%

    Taxes on Senior Citizen FDs

    The interest earned on senior citizen fixed deposits may be liable for income tax based on the applicable laws. These taxes, if any, are deducted at the source however, in case you are not liable to pay taxes you can submit forms 15G or 15H to the banks.

    If the term deposit is an NRE deposit then it may not be liable for taxes however in the case of NRO and FCNR deposits interest earned may be liable for taxes.

    Benefits of FD for Senior Citizen

    There are a multitude of benefits that can be gained from opening senior citizen fixed deposits, chief among which are:

    • They offer special interest rates which tend to be higher, thereby resulting in more earnings.
    • It creates a safe space for the money to grow in at a steady pace.
    • The interest earned on these deposits can be turned into monthly incomes thus providing more peace in your retirement years.
    • The senior citizen fixed deposit can also be a tax saver deposit which help get tax deductions under section 80C of the IT Act.

    Perfect Fixed Deposits Deals for you

    News About Senior Citizen Fixed Deposits

    • Senior Citizens Can Now Avail Fixed Deposits with 8% Interest

      Senior citizens who are on the search for a regular monthly income have some good news as there will soon be an extra option from which they can choose. Narendra Modi, the Prime Minister of India, recently announced that the new FD scheme will offer 8% interest for a period of 10 years. Interest will be paid on a monthly basis, and the limit for the maximum amount that can be invested stands at 7.5 lakhs. Other details such as taxability and options for premature withdrawals are yet to be finalised, but going by the lock-in period and the interest rate on offer, the scheme seems to be a good option for senior citizens.

      16th January 2017

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