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    By: Bijan Biswal
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    By: Bijan Biswal
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    Senior citizen FDs pr Fixed deposits are the term deposit plans that have exceptional interest rates that many leading banks are offering to the ones who are over 60 years of age. The fixed deposit plans that are offered to the senior citizens offer various range of benefits to the senior citizens that is apart from the additional interest rate that can exceed up to 0.50% than the ones being offered to the general public.

    The regular interest payout option can be beneficial to the senior citizen to get a reliable and steady income stream in the post-retirement years. They can also avail of loans against the fixed deposit if they need. The fixed deposits of the senior citizen can also help to save their taxes in case it is a fixed deposit of a five-year tax saver at the same time earning some additional interest.

    Features of the fixed deposit by the senior citizen

    The features of the senior citizen's fixed deposits remain the same when compared with the regular term deposits. Some of the features to be mentioned are:

    1. The senior citizen fixed deposits offer tenures for the deposit, ranging from seven days to up to ten years. It solely depends upon the bank.
    2. The facilities of nominations are available on the senior citizen's fixed deposits, where depositors will be able to declare a person.
    3. The rate of interest that is offered under the senior citizen schemes are decided by spending on the term deposit.
    4. The interest earned is compounded based on quarterly and can be added to the value of the fixed deposit's nature or credited to one account.
    5. Once the senior citizen's fixed deposit is created, it can be closed prematurely at any point in time. In the case of tax saver fixed deposits, premature withdrawal is not at all possible, and it may also end up attracting penalties with the regular fixed deposits based on the bank's rules.
    6. The limits can range from Rs. 1 crore to any higher amounts that can be deposited under the senior citizen fixed deposit scheme. The limits are solely decided by the banks and can vary depending upon the decision of the bank. 
    7. Some of the fixed deposits can also be a tax saver deposit which has the facilities of a lock-in period of five years. They still offer special rates of interest to senior citizens.

    Taxes on the fixed deposits of the senior citizens

    The interest that is being earned on the fixed deposits of the senior citizen is liable for the income tax that is based on the laws applicable. If these taxes are deducted at the source, if you are not liable to pay the taxes, one can submit 15H or 15G forms to the respective banks. In case the term deposits are NRE deposits, then it is not liable for the taxes. In the case of FCNR and NRO deposits, an interest that is earned may be liable for the tax amount.

    Details of the fixed deposit interest rates for senior citizens in the post office    

    The Department of Posts, Ministry of Communications of the Government of India, offers fixed deposits that will offer the senior citizens an attractive rate of interest. The tenure must be compared based on the latest fixed deposit rate. It will help to choose the tenure where it will provide the highest rate of interest. When deposits are concerned, the fixed deposit rates of the India Post Office fixed deposits are considered the best with three years, one day to five years. The current interest rate is 6.70% per annum.

    In case one is looking for a short term deposit with the Post Office of India, the Fixed Deposits rate of interest ranges from 5.50% per annum to 5.50% per annum with a period of seven days and less than one year. These types of deposits are known to be short term deposits because they have tenure, which is less than one year. The fixed deposit rates for the short term India Post Office in the case of senior citizens range from 5.50% to 5.50% per annum.

    In case a senior citizen is willing to invest in long term deposits, the fixed deposit interest rates for senior citizens in Post Office in India with the period of five years to five years are considered as the excellent choice with the rate of interest on the fixed deposits for a period of five years at the rate of 6.70%. Special rates are offered to the citizens from different banks with the highest deposit rates of 6.70% per annum on the long term fixed deposits.

    The India Post Office fixed deposits offer a very good as well as a higher rate of interest when they are compared to the saving deposits.

    Fixed deposit interest rates for senior citizens in SBI

    Senior citizen FD rates 2020 is different from that of the fixed deposit interest rates for senior citizens in SBI. State Bank Of India is considered one of the most reliable fixed deposit providers compared with a number of providers of fixed deposits in the market. SBI fixed deposit provides a number of benefits to its investors, such as flexible tenure, higher returns, loan against the fixed deposit facility, the lower minimum limit of the deposit, among many others. When it comes to the fixed deposits' interest rates, the highest rate that the SBI FD is offering is 5.40%. The latest rate of interest for the SBI FD for the senior citizens ranges from 3.40% to 6.20%.

    In case one is looking for a short term deposit in the State Bank Of India, the interest rates for the fixed deposits range from 3.40% to 4.90% per annum. And when one is looking for a long term fixed deposit, the senior citizens are offered a special rate of interest with the highest rates of deposits of 6.20% per annum.

     


    AUTHOR

    Bijan BiswalFriday , March 19 , 2021

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    Mr Bijan is the man behind www.paisababu.com. He is a well qualified (B.com, MCA, MBA, LLB ) and entrepreneur having more than 20 years expertise in Business. He engaged in blogging for many years. Paisababu.com blog is ranked as one of the Top Personal Finance Blog in India. He is not affiliated with any financial product, service provider, agent or broker. The purpose of this blog is to spread financial awareness and help people in achieving excellence for money.to make ware people about various financial products in India for their use. Please note that the views expressed on this Blog/Comments are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.

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