Senior Citizen FD Rates

Senior Citizen fixed deposits are the financial instrument for increasing wealth and saving on taxes. The interest rate on senior citizens fixed deposits are higher than general FD rates. Senior citizens FD provide an excellent choice for senior citizens who have low or irregular income. Most banks offer a higher interest rate on FD Interest rates for Senior Citizens.

Features of the senior citizens FD are as follow:

• The term of the Senior Citizen FDs lies between 7 days to 10 years.
• Most banks offer a higher rate of interest on senior Citizen FDs.
• Nomination facility is available under this type of FD.
• Individuals can also opt for special FD such as Tax saver FD to save taxes. Tax savers FD have a lock-in period of 5 years
• The interest earned is compounded on a monthly, quarterly, half- yearly or annual basis.
• The maximum limits under the senior Citizen usually lie around Rs. 1 crore and may differ from banks to banks.

You have to fulfil the following eligibility to open a senior citizen fixed deposit account:

• Individuals should be above the age of 60 years. However, some banks allow individuals above the age of 55 or those who have taken early retirement but the rules and terms and conditions for this differs from bank to bank.
• NRI senior citizens can open a fixed deposit account with NRE or NRO accounts.

• Age proof document
• Passport
• Aadhaar Card
• PAN card and PAN
• Photograph

Tax Saver FD is a type of fixed deposits by investing in which you can get tax deduction under section 80C of the Indian Income Tax Act, 1961. An individual can claim a deduction of a maximum of ₹ 1.50 Lakh by investing in tax saver fixed deposits. Some of the main features of tax-saving FD are as follow:

• The lock-in period is of 5 years.
• Interest earned is taxable.
• Rate of interest earned on tax savers FD generally lies from 5% to 7%.

• State Bank of India extends the date for SBI WeCare FD Scheme
  SBI has extended the date for special senior citizen FD scheme for the second time. This scheme is now valid till 31st March 2021. Earlier, the scheme was introduced to offer financial aid to the senior citizens in the times of falling interest rates due to the Covid-19 pandemic and was valid till 31st December 2020. Under this scheme, senior citizens can earn upto 6.20% on their deposit, which is 80 points above the applicable rates to the general public.

✅Who can open a senior citizen fixed deposit account?

An individual who falls in the senior citizens’ category, who is 60 years old or above can apply for senior citizens fixed deposit account. To open an FD account, proof of residence and proof of address is required.

✅Which bank is best for senior citizens?

The best bank for senior citizens depend on the individual’s requirement and may differ. Some of the best banks that offer higher returns on senior citizens FD account are India Post Office, ESAF Small Finance Bank, DCB Bank, AU Small Finance Bank, Equitas Small Finance Bank.

✅Is interest on FD taxable for senior Citizen?

The senior citizens who are residents of India are exempted from income tax on their interest earned up to ₹ 50,000 in a financial year. If the interest earned is above ₹ 50,000 in a financial year, then the interest amount will be eligible for a tax deduction.

✅What is the age for senior Citizen for bank FD?

Age of senior Citizen should be 60 years or above on the date of opening an FD account.

✅How much interest is tax-free for senior Citizen?

Interest income of upto ₹ 50,000 in a financial year is tax exempted for a senior citizen.