Fixed Deposits (FD) are a popular investment option in India because they offer a low-risk investment opportunity with assured returns.
People in India invest in FDs due to multiple reasons like guaranteed returns, low risk, flexible tenure, tax benefits etc..
Banks offer special FD interest rates to senior citizens. There are many schemes in banks and post offices which are primarily targeting senior citizens.
In India, a senior citizen is a resident Indian who is of the age of 60 years and above and a super senior citizen is a resident Indian who is of the age of 80 years and above at any time during the respective financial year.
For empowerment of senior citizens, the Union Budget 2023-24 also announced that the maximum deposit limit for Senior Citizens Savings Scheme to be enhanced from the current Rs 15 lakh to Rs 30 lakh from next financial year.
In FD, the interest rate is fixed for the entire tenure of the deposit, which means that investors know exactly how much they will earn at the end of the deposit term.
FDs are also considered to be one of the safest investment options because the risk of losing money is minimal.
FDs come with flexible tenure options, allowing investors to choose a term that suits their financial goals and needs.
FDs offer tax benefits under Section 80C of the Income Tax Act.
Here’s a comparison of fixed deposit interest rates offered by 5 Public Sector Banks (PSBs) to senior citizens on fixed deposits duration of 5-10 years (Rates for deposits less than Rs 2 Crore)
1. State Bank of India
State Bank of India (SBI) is offering 7.5% per annum (From 15/02/2023) interest rate to senior citizens on 5-10 years fixed deposits. For the general public, the FD interest rate is 6.50% for the same period.
SBI has also introduced a specific tenor scheme of ‘400 days’ (Amrit Kalash) at rate of interest of 7.10% (w.e.f February 15, 2023). Senior citizens are eligible for a rate of interest of 7.60%. The scheme is valid till March 31, 2023.
2. Punjab National Bank
Punjab National Bank (PNB) is offering 7% FD interest rate to senior citizens on a 5 year scheme.
The bank is offering 7.3% interest to senior citizens for the period between 5 and 10 years.
For the general public, the bank is offering 6.50% FD interest rates for 3 to 10 years.
Recently, PNB raised interest rates on several fixed deposits tenures by up to 30 basis points (bps). The new interest rates came into effect on February 20.
3. Central Bank of India
Central Bank of India has announced 6.92% per annum interest rate to senior citizens on FDs of 5 years and above and up to 10 years. Same interest rate is applicable for a duration between 3 and 5 years FD.
4. Canara Bank
Senior citizens opting for FDs in Canara Bank can get 7% per annum interest for 5 years for callable deposits. Same rate of interest is applicable for 3 years and above to less than 5 years period.
For non-callable deposits above Rs 15 lakh and below Rs 2 crore, the bank is offering 7.45% interest to senior citizens customers.
5. Bank of India
Bank of India is offering 6.75% interest to senior citizens on fixed deposits from 5 to less than 8 years. Same rate is applicable on the period 8 years and above to 10 years.
The bank is offering 7.25% interest rates to senior citizens for 2 years to less than 5 years FD scheme.
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