Senior Citizen Fixed Deposit Scheme: Know What Different Banks Offer 

Senior Citizen Fixed Deposit Scheme is the fixed deposit scheme offered exclusively for senior citizens. The fixed deposit rates offered to senior citizens is higher than the regular rate of interest on FD. Thus, it provides an excellent choice for senior citizens who have low or irregular sources of income.

Let’s now catch on what are the features of the FD scheme for senior citizens.

Features of Senior Citizen Fixed Deposit Scheme: Features of the senior citizens FD are as follow:

• Like a regular FD scheme, the tenure of the Senior Citizen FDs also ranges between 7 days to 10 years.
• As stated above, FD rates are higher on senior Citizen FDs. Also, the interest is compounded on a monthly, quarterly, half-yearly or annual basis.
• Senior Citizens can also avail nomination facility under this type of FD.
• The interest earned is The maximum limits under the senior Citizen usually lie around Rs. 1 crore and may differ from banks to banks.
• Further, they can also avail special tax-saver FD to avail tax benefits on FD. Such fixed deposits have a lock-in period of 5 years to avail benefits when filing Income Tax Return.

Now, you have known the features of Senior Citizens FD Scheme, let’s have a look at FD rates offered by popular banks.

Are you eligible for the Senior Citizen FD Scheme?

There aren’t many eligibility criteria that you need to follow to open a Senior Citizen FD account, except that you must be above the age of 60 years. In some cases, banks may, however, allow you to invest in senior citizen FD schemes if you are above 55 years as well.

Also, NRI senior citizens can open a senior citizen fixed deposit account with NRE or NRO accounts.

 Special FD Scheme of different banks:

Various banks have launched their special schemes for Senior Citizens. Some of them are listed below:

1. State Bank of India: Known as ‘SBI We Care’, the scheme was started by SBI in May 2020 and is valid till September 2020. It provides FD interest at 6.20% p.a to senior citizens for a tenure of 5 years.
2. IDBI Bank: Known as IDBI Naman Senior Citizen Deposit, this FD scheme is available for a tenure ranging from 3 years to 7 years. Under this scheme, senior citizens can get interest at 6% on their FD funds. Also, the scheme is valid till 30th September 2020.
3. Bank of India: Senior Citizens can avail the benefit of this FD scheme for a term of 5 years or more at 6% p.a. Under this scheme, investors can get additional premiums over and above existing BPS rates depending on the tenure of the investment period.
4. HDFC Bank: The special scheme launched by HDFC for senior citizens is known as HDFC Senior Citizen Care. This scheme is also valid till 30th September 2020. Under this FD scheme, the interest rate applicable to FD is 6.25%.

Conclusion: Thus, senior citizens can invest in the Senior Citizen FD scheme to secure their savings. Along with that, they are also eligible for tax deduction up to Rs. 50,000 on the interest earned on FD. Further, they can also invest in a tax-saver FD to get additional tax benefits on the funds invested.