Banks or financial institutions consider individuals aged 60 or above senior citizens. These institutes offer certain advantages, which are provided in terms of additional interest rates, interesting options to take loans against fixed deposits, and also have a stable source of income. Let us explore different aspects of senior citizen fixed deposit and how you can gain maximum from it.
What is a Senior Citizen Fixed Deposit?
The Senior Citizen FDs are term deposit plans that are offered at an interesting rate of interest to individuals aged 60 or older. Senior citizens benefit from fixed deposits with around 0.25% or 0.5% p.a. higher interest rates than general fixed deposits. Generally, it lies in the range of 3 to 8.5% among different banks.
Features of Senior Citizen Fixed Deposit
- The tenure of Fixed Deposit can range from 7 days to 10 years.
- The FD amount can be of amount even more than 1 crore.
- It offers the option of premature closer without penalty. The exception to this is tax-saver FD.
- FD can serve as collateral for the loan.
- Comparatively higher interest rates compared to general fixed deposit accounts.
- Individuals get the freedom to choose the frequency of payment. It can be monthly, quarterly, or yearly.
- Senior citizens can expect fixed returns.
- The application procedure is easy, with the availability of both online and offline modes.
- Offers safety to your hard-earned money.
- They can benefit from additional facilities like nomination loans, premature withdrawal, and sweep-ins.
- An automatic renewal facility eliminates the need to physically visit or remember the maturity date for performing FD again.
Basic Components of Senior Citizen Fixed Deposit
Some of the basic details about fixed deposits are:
Principal amount: The lower limit varies from bank to bank, while the upper limit is more than 1 crore.
Tenure: It can range from 7 days to 10 years.
Taxation: The senior citizens can reduce up to INR 50,000 from the total amount before calculating them for tax levied on the citizens.
Senior Citizen Fixed Deposit Benefits
Senior citizens can expect the following benefits:
- Low risk: It offers safe investment returns owing to fixed interest rates. It can be a source of a diverse investment portfolio that can potentially increase your risk tolerance. Therefore, these fixed deposit offers guaranteed returns and maximum security.
- Interest benefits: The interest offered on these fixed deposits is comparatively higher than general fixed deposits. The return period can also be of varying periods.
- Source of income: The periodic fixed deposit returns can be converted into a smooth source of monthly income.
Documents Required For Senior Citizen Fixed Deposit
- PAN card
- Age proof
- Photograph
- Aadhaar card
- Passport
Eligibility Criteria for Senior Citizen Fixed Deposit
The Indian or non-Indian residents can open the Senior Citizen FD accounts if they are aged 60 years or older at the time of booking. The age limit, however, may vary among the banks. Going through the guidelines and information is important before selecting any option.
Methods of Opening Senior Citizen Fixed Deposit
The account can be opened either online or offline. The online procedure requires visiting the official website or app of the bank. You need to look for fixed deposits and choose the appropriate option. Decide the principal amount and tenure and proceed. You will be displayed the interest rate and amount expected to be received on maturity. The principal amount will be debited directly from the savings account.
The offline procedure requires a visit to the branch followed by filling out the appropriate form. You need to submit the same to banking officials along with other required documents. You can either choose to automatically cut the amount from your bank account or opt for deposit methods like cheque or DD.
Conclusion
Senior Citizen Fixed Deposit is an interesting saving option for banks and financial institutions that offer a stable source of income. With fixed returns provided on the amount, senior citizens receive relatively higher interest. They also get several other benefits and flexibilities concerning the operations related to their money. Considered term deposit accounts, senior citizens are encouraged to invest in fixed deposits for a diverse and safe source of investment returns.
What do you understand about the term deposit?
Term deposit refers to ‘locking the money for a specific period to secure higher interest payments.”
How many types of term deposits are there?
Term deposits are of multiple types like cumulative and non-cumulative deposits, senior citizen term deposits, short and long-term deposits, and a few more.
What is the procedure to indicate non-liability for tax on senior citizen fixed deposits?
Individuals are required to fill out form 15G or 15H to indicate their non-liability to pay taxes.
Is my senior citizen fixed deposit calculated compound or through simple interest?
The interest calculation on Senior Citizen FD is possible through both methods. The specific calculation for any Fixed Deposit depends on multiple factors like principal amount, tenure, payment type, and financial institution. It is recommended to check it from your bank for better clarity.
How do I know my expected returns without signing up for the fixed deposit?
There are lots of fixed deposit calculators that take into account principal amount, tenure, and offered interest rate to calculate the expected returns instantly. Consider using them for insights and comparison among interest rates offered by different banks.
Can I know the details of my senior citizen fixed deposit online?
Yes, almost all the banks and financial institutions provide this facility. You can visit the official website or app, log in and head towards the Fixed Deposit section for details. Alternatively, you can connect with official customer care through the number provided on their website or app and ask for directions for more information.