A traditional risk-free investment is a fixed deposit (FD). These safe investment schemes are popular among senior citizens as they can not afford to lose money in the volatile market investments. Recently, FD rates have been increased with the repo rate hike by the Reserve Bank of India (RBI), making senior citizen fixed deposit rates more attractive.
Taking special care of the senior citizen’s investment, the bank provides special fixed deposit interest rates and services to them. Take RBL Bank; it has introduced new fixed deposit schemes for senior citizens of 80+ years in honour of International Senior Citizens Day with a preferential interest rate of 0.75% for all tenures.
Table of Contents
- What is A Fixed Deposit for Senior Citizens?
- Benefits of Special fixed deposit Schemes for Senior Citizens
What is A Fixed Deposit for Senior Citizens?
A senior citizen fixed deposit product is a savings scheme to help investors earn assured returns. In this, the investment period is from 7 days to 20 years. The money invested by the senior citizens will continue to earn at a fixed interest rate without the interruptions of market fluctuations. Therefore, it is an easy investment option for the elderly aged 60 years and above who generally need regular income and are looking to safeguard their funds. Compared to regular fixed deposits, senior citizen fixed deposit rates are high.
Benefits of Special fixed deposit Schemes for Senior Citizens
Most features of Senior Citizen fixed deposits are similar to regular fixed deposits. But they offer several benefits to senior citizens of 60-80 years. Let us discuss the key benefits of senior citizen fixed deposits:
1. Special Interest Rate for Higher Returns
A senior citizen fixed deposit get you assured returns at a higher interest rate. Once the amount is deposited, you will get higher returns with additional senior citizen fixed deposit rates over regular or non-senior citizen fixed deposits. Banks offer an additional interest rate of 0.50% to senior citizens and 0.75% to super senior citizens (80 years and above). You will continue to earn high and fixed returns until maturity, regardless of market conditions.
2. Financial Growth with Safety
Most investment tools are subject to market-related returns with unwanted risk exposure. Bank fixed deposits provide senior citizens with the desired safety for their savings. One factor concerning safety is no link to the market, and the second is insurance. Each bank deposit is insured up to a maximum of Rs. 5 Lakh.
3. Source of a Regular Income
Senior citizen fixed deposits provide you with a regular interest income. The depositor can opt to receive it periodically as per their financial requirement. It makes FD investments more attractive to senior citizens who depend on the returns on their investments. You must choose a non-cumulative FD to receive periodic interest income – monthly/quarterly/half-yearly/annually.
4. Tax-savings Under Section 80 C
Tax savings are another benefit of senior citizen fixed deposits. Regular fixed deposits allow a tax exemption on earned interest up to Rs. 40,000 in a financial year. Senior citizens can get an exemption even more than usual, i.e., up to Rs. 50,000.
Senior citizen fixed deposits offer liquidity to the depositors. Banks offer you an Overdraft (OD) facility of up to 90% of the principal value.
6. Online Booking
There is the convenience of booking senior citizen fixed deposits online. You can make investments without stepping out of your home. Look at fixed deposit interest rates with different banks and book a fixed deposit online to earn a high rate.
One can invest in a senior citizen fixed deposit account with an amount as low as Rs. 1000. After that, you can increase the amount in multiples of Rs. 1000 without a maximum cap.
8. Nomination Facility
Senior citizen fixed deposits are offered with partial/premature withdrawal. It helps them to overcome a sudden financial crisis or any medical emergency.
9. No Penalty for Premature Withdrawal
A few banks allow senior citizen fixed deposits to withdraw without penalty charges. Therefore, your fixed deposit interest rates may or may not be declined as a penalty, depending on the bank rules.
Thus, senior citizen fixed deposits are designed to meet the investment requirements of risk-averse individuals in the age group of 60-80 years. Open a deposit account online and enjoy assured and higher returns with utmost safety. Super Senior Citizens over 80 years can also book their fixed deposits through free doorstep banking services.