Senior Citizen Fixed Deposit: Process, Interest Rates and Benefits

senior Citizen FD Rates

Banks recommend senior citizen fixed deposits to elderly citizens who are nearing retirement or are already retired. With FDs, they not only get better security but are also able to have peace of mind knowing they have chosen a safe investment option. For them, FDs are beneficial despite highs and lows in the market.

So, let’s look at what a senior citizen FD is, how you can open a senior citizen fixed deposit account, and the top banks offering the same.

What Does a Senior Citizen FD Mean?

Senior Citizen FD is a great investment option that allows individuals aged 60 or more to increase their wealth and save money on taxes. The senior citizen fixed deposit interest rates are higher than standard fixed deposit rates. It is known as one of the most beneficial financial sources for senior citizens having irregular or low incomes.

Is Senior Citizen FD a Good Investment?

Offering stability and security, a senior citizen fixed deposit is an investment any elderly can go for with closed eyes. Here are a few reasons why:-

  • The interest earned via a senior citizen FD can be used by senior citizens to pay for their expenses.
  • It acts as a safety net for senior citizens and protects them from market fluctuations, offering stable returns.
  • Individuals opting for a senior citizen FD have an option to select a minimal deposit FD. They do not require starting an FD with a large sum and can create a deposit with only ₹25,000.
  • This FD type is easy to withdraw, especially in case of emergencies. It is a source of finance for senior citizens.

Since the objective of opening a senior citizen FD is to use it during times of need, the application process for it is pretty simple. Earlier individuals had only one option – to visit the bank/office and fill out the application on-site. But now, they can complete the application process online and open the FD account easily.

Senior citizens can create a fixed deposit with the amount of their choice within the comfort of their homes. Banks have specially trained officials who interact politely with the senior citizens, resolve their doubts and explain the application process.

Benefits and Key Features of Senior Citizen FD

If you are 60 or above and are considering opening a senior citizen fixed deposit, then take a look at the key features and advantages below:-

  • Senior citizen fixed deposits have longer terms, ranging from a week to 10 years.
  • Banks provide a greater rate of interest on senior citizen FDs.
  • Many fixed deposits don’t have the nomination option, but senior citizen FD has this option available.
  • Senior citizens have the option to choose a special FD like a tax saver fixed deposit. This kind of FD generally has a fixed period lock of at least 5 years.
  • Individuals earn interest on a monthly, half-yearly, quarterly, or yearly basis. They can even choose the time they want to receive their interest returns.
  • Different banks set different maximum limits for senior citizen FDs. Some have set it as ₹1 crore, while others have set a lower or higher limit.

What is the Process of Opening a Senior Citizen FD?

The procedure of opening a senior citizen FD involves visiting a post office. The depositor has to fill the required application form for opening the account. Additionally, they need to submit a deposit amount via cheque or demand draft.

A senior citizen can also open a fixed deposit in the bank. Today, almost every bank accepts online applications where individuals can submit an online FD form. In this case, the amount is deducted from the individual’s savings bank account (preferred).

Senior citizens also have the choice to share how they want to receive the interest – annually, quarterly or monthly. The rest of the steps are the same as that of opening a standard fixed deposit for a non-senior citizen.

Senior Citizen Fixed Deposit Interest Rates in Different Banks

Bank Name

Interest Rates (% p.a.)

Highest slab

1Year

3-years 

5-years 

Bank of Baroda

7.75

7.25

7.55

7.15

Bank of India

7.75

6.5

7.25

6.75

Bank of Maharashtra

7.5

6.85

6.5

6.25

Canara Bank

7.75

7.4

7.3

7.2

Central Bank of India

7.65

7.25

7

6.75

Indian Bank

7.75

6.6

6.75

6.75

Indian Overseas Bank

7.75

7

7

7

Punjab National Bank

7.75

7.25

7.5

7

Punjab & Sind Bank

7.9

6.9

6.5

6.5

State Bank of India

7.6

7.3

7

7.5

UCO Bank

7.55

6.75

6.8

6.7

Union Bank of India

7.5

6.8

7

7.2

Banks Offering the Best 5 Year Senior Citizen FD Rates

Name of Banks

5 Year Senior Citizens FD Rates

Bank of Baroda

7.15

Bank of India

6.75

Bank of Maharashtra

6.25

Canara Bank

7.2

Central Bank of India

6.75

Indian Bank

6.75

Indian Overseas Bank

7

Punjab National Bank

7

Punjab & Sind Bank

6.5

State Bank of India

7.5

UCO Bank

6.7

Union Bank of India

7.2

Insurers Offering Loan Against FD

There are several banks offering loans or credits for multiple purposes against their senior citizen fd rates that can be unearth in the below-mentioned table:-

Name of Bank

Interest Rate Charged (In % p.a. higher than normal FD rates)

Loan Limit Against FD Amount (%)

Limit of Loan Amount

Punjab National Bank (PNB)

0.75% p.a. higher

90%

Rs. 25,000- Rs. 5 crores

State Bank of India (SBI)

1% p.a. higher

95%

Rs. 5,000- Rs. 5 crores

Axis Bank

2% p.a. higher

85%

Rs. 25,000 and above

HDFC Bank

2% p.a. higher

90%

Rs. 25,000 and above

Bank of Baroda

1% p.a. higher

90%

No upper limit

Citi Bank

90%

Rs. 1 lakh and above

Yes Bank

1% p.a. higher

90%

Rs. 10,000- Rs. 2 crores

Bandhan Bank

1.5%-2% p.a. higher

90%-95%

Union Bank

2-3% p.a. higher

75%

ICICI Bank

90%

Up to Rs. 10 crores

How to Avoid TDS Deduction on Senior Citizen’s FD?

To avoid TDS deductions on senior citizens FD rates is to abide by Form 12BBA. It is a legal solution that says to claim for TDS deductions under Section 80C to 80U in the book of law. There are other insights as well that needs to be known for better benefits.

  • Tax credits that must be claimed under Sections 80C and 80U.
  • Tax rebates that must be claimed under Section 87A in order to bring Taxable Income Below the Rs. 5 lakh Exemption.
  • The total pension and interest from fixed deposits (FDs).

Understanding the TDS Threshold

Per IT rules, if elderly individuals 60 years of age and older earn interest income that surpasses Rs. 50,000 in a fiscal year, a 10% TDS is required. This threshold should be taken into consideration while managing your fixed deposits.

Advantages of filing Form 12BBA

Senior citizens can avoid the trouble of receiving a refund for TDS deducted from their fixed deposit interest income by submitting Form 12BBA. You will save time and effort by using this form to ensure that TDS is not taken at the source.

How to Use Form 12BBA?

The bank determines your total income after taking section 87A tax deductions and rebates into account when you file Form 12BBA.

Top Public Sector Banks for Senior Citizens Fixed Deposit Interest Rates

Here are the top PSB (Public Sector Banks) where senior citizens can rely for an impressive “Senior Citizen” fixed deposit interest rate. Have a look:-

State Bank of India
Punjab & Sindh Bank
Union Bank of India
Canara Bank
Bank of Baroda
Punjab National Bank

Top Private Sector Banks for Senior Citizens Fixed Deposit Rates

Depending upon your selected tenure, the Senior Citizen FD Rates will stunt you with mind-blowing interest returns in these privately owned banks:-

Bandhan Bank
DCB Bank
Yes Bank
RBL Bank

How to Invest on Senior Citizen FDs? 

To invest in senior citizen FD investment schemes, one has to follow a few steps online or offline. Check both methods to opt for the best suitable medium for yourself. 

Invest in Senior Citizen Fixed Deposits Offline

  • Reached out to your nearby bank and demand the executive for an FD investment form. 
  • Fill in the details such as name, registered mobile number and email ID. 
  • For existing customers, one has to verify the details to activate their senior citizen FD investment plan. 
  • Whereas, in case you are new, you have to fill in all the details such as ID proof, address proof and more, for KYC purpose.
  • Then, choose your preferred deposit amount, and the tenure and return payout type to start the operation. 
  • Deposit the amount to the executive and await confirmation on your mobile number or email ID. 

Invest on Senior Citizen Fixed Deposits Online

  • Login or register to any of your preferred bank website.
  • Please provide your name, email address, and registered mobile number. 
  • For current customers, verification of the information is required before activating their senior citizen FD investment plan. 
  • For 0KYC purposes, however, you must fill out all the necessary information if you are a new user.
  • Then, to begin the transaction, select your preferred deposit amount, tenure, and return payout type. 
  • Deposit the chosen amount via online banking or UPI.

Senior Citizen Fixed Deposit Interest Rates in Different Banks

To open a senior citizen fixed deposit, one need to have the following documents:-

  1. Photograph
  2. ID proof (Voter ID Card, Passport, etc.)
  3. Proof of Age
  4. Proof of Address (Aadhar card, passport, water bill, electricity bill, etc)
  5. PAN Card (if not available, then Form 60)
  6. Form 15H

Make sure you have all these documents. You may have to submit a soft or hard copy of all of these documents depending on the bank’s requirements.

What is the Eligibility for Senior Citizen  FD?

Before attempting to apply for a senior citizen FD account, make sure you meet the following criterion:-

  • Banks only consider those individuals as senior citizens who are 60 or more in age.
  • Some banks also have a super senior citizens age bracket. This includes individuals who are more than 80 years of age. They get additional FD interest rates over others.
  • Eligibility criteria also vary from bank to bank sometimes. For instance, several banks allow individuals more than 55 years of age to apply for Senior Citizen FDs. It’s a part of their special FD schemes and comes with its own set of terms and conditions.

End Thoughts

In conclusion, senior citizen fixed deposit interest rates, sometimes referred to as senior citizen FD rates, are essential to the financial planning of our elderly population. These specialised fixed deposit plans provide older individuals with good returns, making them a popular investment choice for those in their golden years.

Senior Citizen FDs offer a sense of stability and financial security, enabling seniors to benefit from a consistent income stream during retirement. Seniors may be able to lessen the effects of inflation and rising living expenses thanks to the greater interest rates offered on these deposits. Additionally, these FDs offer various tenure options, letting senior persons select a term that meets their requirements.

You May Also Read

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Loan against Fixed Deposit Tamilnad Mercantile Bank FD Rates
Flexi Fixed Deposit Allahabad Bank FD Rates
Term Deposit Andhra Bank FD Rates
15G and Forms 15H Loan Against Fixed Deposit SBI

Frequently Asked Questions (FAQs):-

Opening a fixed deposit account as a senior citizen is a completely different experience than opening one as an adult. You are bound to have questions or confusion. To make things easier, we have answered a few common questions that will give you some clarity.

How do banks deduct TDS on a senior citizen fixed deposit?

Banks do not deduct TDS if the combined interest from all your fixed deposits is less than ₹40,000 per annum. TDS is deducted only if the limit of all FDs is ₹50,000 or more. Before 2019, the TDS limit on interest income was ₹10,000.

Is it possible to open a joint senior citizen fixed deposit account with a non-senior citizen?

Yes, it is possible to have a joint senior citizen FD with an individual who isn’t a senior citizen. But the primary account holder has to be a senior citizen if you choose a special senior citizen fixed deposit scheme.

Can a senior citizen open a 2nd or 3rd FD account with the same bank? If yes, then what documents are required?

Yes, a senior citizen can easily open more than one fixed deposit in the same bank. Each new FD requires them to submit proof of age.

Are there any extra interest rates attached to bulk fixed deposits for senior citizens?

The answer to this question depends on the financial institution. In the case of bulk deposits, especially when the amount is ₹2.5 crores or less, there are no additional interest rates for senior citizens.

Do super senior citizens receive extra rates of interest for FDs?

It depends on the bank or the non-banking financial company if they want to offer extra rates of interest for super senior citizen FDs or not.

Can I claim fixed deposit interest without TDS if my income is lower than the taxable limit?

Yes, you can get fixed deposit interest if your income is below the taxable limit. For that, you would require filling out and submitting Form 15G if you are an adult and Form 15H if you are a senior citizen.

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