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Understanding Benefits of Fixed Deposits for Senior Citizens

In today’s world where new investment options emerge frequently, certain time-tested investments continue to offer security and stability. One such reliable investment, is fixed deposit (FD). This blog delves into the specific advantages of FDs for senior citizens, helping you understand why this investment is the right choice for you.

What is a Fixed Deposit?

A fixed deposit (FD) is a financial product provided by banks or NBFCs, offering customers better interest rates compared to standard savings accounts. When you open an FD, you deposit a sum of money that is locked in for a period of your choice, with durations ranging from 7 days to 10 years. One can start a fixed deposit account with an interest rate offered by a bank offered during that period of time and it remains constant until maturity. An interest calculator for fixed deposits lets you know the returns beforehand thus helping you plan your investment effectively.

5 Key Benefits of Fixed Deposits for Senior Citizens

1. Higher Interest Rates:

One of the biggest benefits of FDs for senior citizens is the higher interest rates offered by banks. These rates are usually higher than regular rates, helping senior citizens earn more money. Often, they can be up to 0.5% higher, leading to extra income.

2. Safe Investment Option:

In today's market, there are multiple investment options that can help grow your money. However, many of these are subject to market risks, thus posing a certain level of risk. For senior citizens, it is important to have a secure form of investment to multiply their funds. Fixed deposits meet this need by offering guaranteed returns, making them ideal for those with a low-risk tolerance.

3. Regular Income Stream:

Post-retirement, having a regular supplementary income becomes essential. Fixed deposits for senior citizens provide this benefit through regular interest payouts. You can choose the frequency of these payouts - monthly, quarterly, half-yearly, or yearly depending on what suits your lifestyle best. This flexibility ensures a steady income stream allowing senior citizens to have a stress-free life.

4. Tax Benefits:

Tax benefits remain a significant advantage on FDs for senior citizens. Section 80TTB of the Income Tax Act provides tax benefits on interest earned from deposits with banks, post offices, or co-operative banks. Senior citizens can claim a deduction on interest income up to INR 50,000.*

This enhanced tax exemption not only provides additional financial relief but also makes FDs an even more attractive option for senior citizens.

5. Overdraft Facility:

Beyond interest payouts and tax benefits, fixed deposits offer another financial advantage: the ability to secure an overdraft against your FD. This feature provides financial liquidity, enabling you to access immediate funds in times of need without breaking your FD. This method ensures that your investment remains intact while you address any short-term financial requirements.

How to Open a Senior Citizen FD Account

You can open a Senior Citizen FD account by visiting the bank in person or online. Most banks also accept online applications where you can fill in the details in the FD account opening form and submit it. Senior citizens can choose to receive interest payouts monthly, quarterly, or annually.

To open a senior citizen fixed deposit account at a post office, visit the post office, fill out the FD opening form, and deposit the investment amount via cheque or demand draft.

Eligibility for starting a Senior Citizen FD:

  • Individuals aged 60 years and above are eligible to open a senior citizen FD account.
  • Some banks also cater to super senior citizens, those over 80 years old, offering higher interest rates than those for senior and general citizens.

Documents Required for starting a Senior Citizen FD:

  • PAN Card
  • FD account opening application form
  • KYC documents (Aadhar card, passport, driving license, or voter ID)
  • Passport-size photographs
  • Form 15H or a self-declaration form

Choosing the Right Financial Institution

Selecting the right financial institution is crucial for maximizing the benefits of fixed deposits.

One such bank is RBL Bank that not only offers fixed deposits but also a comprehensive range of financial services tailored to your needs. Their fixed deposit options for senior and super senior citizens come with competitive rate of returns and flexible features that ensure you get the most out of your investment.

Senior Citizen Fixed Deposits: Bank offers attractive fixed deposit rates for senior citizens, with an additional 0.50% p.a. interest rate compared to regular deposits. Tenure options range from 7 days to 10 years, with flexible interest payout choices—monthly, quarterly, or at maturity.

Super Senior Citizen Fixed Deposits: For individuals aged 80 and above, RBL Bank provides a special fixed deposit rate with an additional 0.75% p.a. interest over regular deposits. Benefits include regular interest payments, no penalty for premature withdrawals, and access to up to 90% of the principal through an overdraft facility.

Invest in RBL Bank Digital FD without a Savings Account.

Just follow these 3 simple steps!

  • Provide Aadhaar & PAN details
  • Complete Full KYC in minutes
  • Fund your FD

*Source - https://www.incometax.gov.in/iec/foportal/help/individual/return-applicable


Disclaimer: Articles published on the website are merely indicative and suggestive in nature and do not amount to solicitation. The contents do not guarantee the desired returns and/or results. Reader is advised to exercise discretion and consult independent advisors for achieving desired result. Visitors to this blog/ website w.r.t products & services offered by RBL Bank Limited herein, shall ensure that the comments / feedback posted shall be restricted to the contents published herein and shall not contain such language that may be un-parliamentary or against any religion, caste, section of society, political view etc. While our endeavor is to publish the comments that are submitted, however, all comments/feedback shall be subject to internal review by RBL Bank Limited. We do not guarantee that the comments that are submitted will be published.

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