Good news for senior and super senior citizens. In a bid to overcome the liquidity crunch, some of India’s top banks – including SBI, HDFC Bank and IDBI Bank — have launched special fixed deposit schemes and revised their FD interest rates, especially for senior and super senior citizens.
IDBI Bank, for instance, has introduced IDBI Chiranjeevi-Super Senior Citizen FD for individuals aged 80 years and above, effective from January 13, 2025, with interest rates ranging between 7.85 and 8.05 per cent. Similarly, the State Bank of India has introduced a new variant of Term Deposit ‘SBI Patrons’ for super senior citizens, whereby super senior citizens will get interest rate of 10 bps above the card rates applicable for senior citizens.
It may be noted that super senior citizen fixed deposits offer safety and guaranteed returns. Super senior citizens earn higher interest rates compared to senior and non-senior citizen depositors. Many banks offer an additional 0.5% to 0.75% above the standard rates for seniors. Therefore, you need to compare rates across different banks to maximise returns.
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FDs come with various tenure options, ranging from a few months to several years. So, choose a tenure that aligns with your financial goals. Short-term FDs offer liquidity, while long-term FDs provide better rates but lock in funds.
Here are a few things to keep in mind while putting your money in FDs.
Premature Withdrawal
Check the terms for premature withdrawal. Most banks impose penalties for early withdrawal. This can reduce the effective interest earned. Consider this if you might need funds before the FD matures.
Tax Implications
Interest earned on FDs is taxable. For super senior citizens, the exemption limit is higher. Interest up to ₹50,000 in a financial year is tax-free under Section 80TTB. Plan your FDs to optimise tax benefits.
Cumulative vs Non-Cumulative
Decide between cumulative and non-cumulative options. In cumulative FDs, interest is reinvested and paid at maturity. Non-cumulative FDs pay interest at regular intervals, suitable for those needing regular income.
Nomination Facility
Senior citizens must ensure that a nominee is assigned to their FDs. This ensures smooth transfer of funds to your beneficiary in case of unforeseen events. Update nominee details as required.
Online vs Offline
Consider opening FDs online for convenience. Online FDs often offer better rates and flexibility. Ensure the bank’s digital platform is user-friendly.
By following these steps, super senior citizens can earn higher interest rate without missing out on other benefits and services provided by banks to the elderly in India.
The table below compares the FD interest rates offered to super senior citizens.
| Super Senior Citizen Highest FD Interest Rates | ||||
| Bank | Interest Rates | Tenure | ||
| City Union Bank | 8.10% | 333 Days | ||
| RBL Bank | 9.25% | 500 Days | ||
| Bank of Baroda | 7.90% | 400 Days | ||
| Bank of India | 7.95% | 400 Days | ||
| Canara Bank | 8.00% | 3 years to less than 5 years | ||
| Indian Bank | 8.05% | 1 year to 375 days | ||
| Indian Overseas Bank | 8.05% | 444 days | ||
| Punjab National Bank | 8.05% | 400 Days | ||
| Punjab & Sind Bank | 8.10% | 555 Days | ||
| Union Bank of India | 8.05% | 456 days | ||
| Compiled by Bankbazaar.com as on 14 Jan 2025. | ||||