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Fixed Deposit Schemes for Senior Citizens

For senior citizens, investing safely and risk-free is crucial. The savings accumulated over a lifetime should be protected with investments that provide stable returns with minimum risks. Fixed deposit schemes meet these criteria by offering stability, safety, and predictable returns. 

To maximise these benefits for senior citizens (above 60 years), banks offer specialised Fixed Deposits (FDs) customised for this age group. Known as senior citizen fixed deposits, these FDs offer exclusive features that help them achieve much-needed peace of mind and financial stability in their golden years. Read on to find out how.

Benefits of fixed deposits for senior citizens

High interest rates

Senior citizens usually get an additional FD interest rate of 0.25% to 0.50% from most banks, which is higher than what is given to individuals below 60. This increment helps your savings grow faster and create a more substantial corpus for your retirement. 

For example, let’s say the regular interest rate for a fixed deposit at your bank is 6% per annum, and for senior citizens, it’s 7%. If you invest ₹2 lakh for five years, under the regular rate, you would earn around ₹70,000 in interest at maturity. However, with the senior citizen rate of 7%, your annual earnings would increase to approximately ₹83,000. This additional 1% boost adds ₹13,000 more to your returns.

Regular income through multiple payouts

IndusInd Bank Fixed Deposits help you get consistent income through regular interest payouts. You can decide if you want monthly, quarterly, half-yearly, or yearly payouts, depending on your financial requirements. This way, you get a part of your investment for various needs while the remaining portion continues to grow. 

Look at the additional benefits you can expect to get:

  • A 100% digital process to open a fixed deposit account
  • Hassle-free instant booking via your PAN and Aadhaar details
  • Priority customer service
  • Best-in-class FD rates
  • Access to premium offers on other banking products 
  • Auto-renewal options to let your savings grow uninterruptedly 

Book an IndusInd Bank Fixed Deposit today and get the peace of mind and stability you deserve in your golden years.

Loan against FD 

Banks typically allow borrowers to take a loan of up to 90%-95% of their fixed deposit value. This option provides liquidity during difficult times without requiring you to break your FD prematurely and incur penalties. This means you can handle expenses, from home renovations and family events to medical emergencies, without relying on other costly debt options. The best part is that your FD continues to accrue interest even while the loan is outstanding. 

Save additional taxes

Section 80TTB of the Income Tax Act, 1961, allows senior citizens to enjoy an exemption of up to ₹50,000 per annum on interest income. For other taxpayers (below 60), the exemption limit is ₹40,000. This helps you, as a senior citizen, maximise your post-tax returns and keep more money in your hands for daily expenses and emergencies. 

Tips to get the most out of senior citizen fixed deposits

A fixed deposit for senior citizens already offers numerous benefits, but with some smart strategies, you can extract even more value.

Opt for higher interest rates Compare FD rates across banks to make sure you are getting the best interest rate available.
Choose the right tenure Banks usually offer higher interest rates for longer durations. This strategy can help you accumulate more interest over time and enhance the growth of your investment.
Use the auto-renewal feature Activate the auto-renewal option to keep your FD actively growing without idle periods between maturity and reinvestment.
Consider splitting your FDs Split large amounts into multiple FDs to benefit from different interest rates and maintain liquidity.
Avoid premature withdrawals If you need emergency funds, consider taking a loan against your FD rather than withdrawing the money, which could incur penalties.

Key takeaways

An FD for senior citizens offers numerous benefits, including a higher interest rate, tax savings, regular income through multiple payouts, and a loan facility. These advantages provide senior citizens with much-needed financial stability and peace of mind during their retirement years. 

Moreover, by choosing the right bank, opting for longer tenures, using FD laddering, and avoiding premature withdrawals, it’s possible to maximise FD returns. So, book a fixed deposit today, use smart strategies to enhance returns, and enjoy the worry-free and comfortable retirement you deserve!

Marco Polo
Marco Polo
Marco Polo is the admin of sparebusiness.com. He is dedicated to provide informative news about all kind of business, finance, technology, digital marketing, real estate etc.
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