Moneycontrol PRO
Open App

Banks hike FD rates for senior citizens. Is it time to invest?

Investment in fixed deposits offer liquidity and periodical interest income to senior citizens

August 26, 2022 / 06:34 PM IST
Several banks have raised interest rates on 3-year FDs for senior citizens after three consecutive repo rate hikes by the RBI. Recently, RBL Bank raised the interest for super senior citizens on its 15-month fixed deposit (FD). While it will offer 7 percent on its 15-month normal FD, it will now offer 7.50 percent to senior citizens (60-80 years' of age) and 7.75 percent to its super senior citizen customers (80 years and above). In August, monetary policy RBI increased repo rates by 50 basis points to 5.4 percent (100 basis points = 1 percentage point). Smaller and new private banks now offer rates up to 7.5 percent on three-year FDs for senior citizens, data compiled by  BankBazaar  shows.
Several banks have raised interest rates on 3-year FDs for senior citizens after three consecutive repo rate hikes by the RBI. Recently, RBL Bank raised the interest for super senior citizens on its 15-month fixed deposit (FD). While it will offer 7 percent on its 15-month normal FD, it will now offer 7.50 percent to senior citizens (60-80 years' of age) and 7.75 percent to its super senior citizen customers (80 years and above). In August, monetary policy RBI increased repo rates by 50 basis points to 5.4 percent (100 basis points = 1 percentage point). Smaller and new private banks now offer rates up to 7.5 percent on three-year FDs for senior citizens, data compiled by BankBazaar shows.
RBI finance_shutterstock_1171401604
Senior citizens should invest a part of their savings in FDs which offer liquidity and ensure interest income periodically. The savings are useful to build an emergency corpus. Although bank FD interest is taxable, a lower tax slab for most senior citizens ensures that tax liability is minimal or nil if other income is negligible. Here are the banks offering the best interests on three-year FDs for senior citizens.

IndusInd Bank
IndusInd Bank and Yes Bank offer 7.50 percent interest on three-year FDs for senior citizens. Among private sector banks, these lenders offer the best interest rates. A sum of Rs 1 lakh invested grows to Rs 1.25 lakh in three years.
Bandhan Bank
Bandhan Bank offers 7.25 percent interest on three-year FDs for senior citizens. A sum of Rs 1 lakh invested grows to Rs 1.24 lakh in three years.
bl08dcbbank
DCB Bank offers 7.10 percent interest on three-year FDs for senior citizens. A sum of Rs 1 lakh invested grows to Rs 1.24 lakh in three years.
RBL Bank
RBL Bank offers 7.05 percent interest on three-year FDs for senior citizens. A sum of Rs 1 lakh invested grows to Rs 1.23 lakh in three years.
 IDFC First Bank  offers 7 percent interest on three-year FDs for senior citizens. A sum of Rs 1 lakh invested grows to Rs 1.23 lakh in three years.
IDFC First Bank offers 7 percent interest on three-year FDs for senior citizens. A sum of Rs 1 lakh invested grows to Rs 1.23 lakh in three years.
 Bank of Baroda  offers 6.50 percent interest on three-year FDs for senior citizens. Among public sector banks, this lender offers the best interest rates. A sum of Rs 1 lakh invested grows to Rs 1.21 lakh in three years.
Bank of Baroda offers 6.50 percent interest on three-year FDs for senior citizens. Among public sector banks, this lender offers the best interest rates. A sum of Rs 1 lakh invested grows to Rs 1.21 lakh in three years.
Smaller private sector banks are offering higher interest rates to garner newer deposits. The Deposit Insurance and Credit Guarantee Corporation, a subsidiary of the RBI, guarantees investments in fixed deposits of up to Rs 5 lakh.
Smaller private sector banks are offering higher interest rates to garner newer deposits. The Deposit Insurance and Credit Guarantee Corporation, a subsidiary of the RBI, guarantees investments in fixed deposits of up to Rs 5 lakh.
The data on FDs is as of August 12, as seen on lenders' websites. Interest rates are for senior citizens of 60-80 (deposit amount below Rs 1 crore). All listed (BSE) private sector banks are considered for data compilation. Banks for which verifiable data is not available are not considered. For all FDs, quarterly compounding is assumed.
The data on FDs is as of August 12, as seen on lenders' websites. Interest rates are for senior citizens of 60-80 (deposit amount below Rs 1 crore). All listed (BSE) private sector banks are considered for data compilation. Banks for which verifiable data is not available are not considered. For all FDs, quarterly compounding is assumed.
Hiral Thanawala is a personal finance journalist with 9 years of reporting experience. Based in Mumbai, he covers financial planning, banking and fintech segments from personal finance team for Moneycontrol.
Sections
ISO 27001 - BSI Assurance Mark