Investing in fixed deposits is popular among senior citizens as it offers liquidity and ensures interest income periodically. As the Reserve Bank of India (RBI) has kept the key repo rate unchanged at a 4 percent low for over a year now, most banks have reduced interest rates on FDs. Despite falling interest rates, smaller private offer interest rates of up to 7 percent on three-year FDs for senior citizens as per data compiled by BankBazaar. Here are the top five private banks offering the best interest rates on three-year FDs for senior citizens.
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Yes Bank offers 7 percent interest on three-year FDs for senior citizens. Among private banks, this bank offers the best interest rates. A sum of Rs 1 lakh invested grows to Rs 1.23 lakh in three years.
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RBL Bank offers 6.80 percent interest in three-year FDs for senior citizens. Rs 1 lakh invested grows to Rs 1.22 lakh in three years.
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IndusInd Bank offers 6.50 percent interest in three-year FDs for senior citizens. Rs 1 lakh invested grows to Rs 1.21 lakh in three years. The minimum investment required is Rs 10,000.
DCB Bank offers 6.45 percent interest in three-year FDs for senior citizens. Rs 1 lakh invested grows to Rs 1.21 lakh in three years. The minimum investment required is Rs 10,000.
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IDFC First Bank offers 6.25 percent interest in three-year FDs for senior citizens. Rs 1 lakh invested grows to Rs 1.20 lakh in three years.
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The smaller private banks are offering higher interest rates to garner newer deposits. The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI, guarantees investments in fixed deposits of up to Rs 5 lakh.
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The data on FDs is as of 27 October 2021, as given on respective websites. Interest rates given are for senior citizens of 60-80 years of age (deposit amount below Rs 1 crore). All listed (BSE) public sector banks and private 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.
