Fixed deposits for senior citizens: Banks that offer up to 7.75% interest on three-year deposits
Leading public and private sector banks such as Bank of Baroda, Axis Bank, HDFC Bank, SBI, Union bank of India, among others are offering the best interest rates on three-year FDs for senior citizens.
The elderly should - and do - invest a part of their savings in fixed deposits (FD), as they offer liquidity and ensure regular interest income. Such savings are also useful while building an emergency corpus. Although interest earned on fixed deposits is taxable, many senior citizens fall in the lower tax brackets. This ensures that their tax liability is minimal or nil if other income is negligible. At present, private and public sector banks offer interest rates of up to 7.75 percent to senior citizens on three-year FDs. Here are the top ten banks (by term deposit holdings) that offer lucrative interest rates on FDs with tenure of three years. Bankbazaar has compiled the data.
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The key parameters for shortlisting these banks include their term deposit holdings, the best interest rate offered to resident Indians over the age of 60 years, retail and callable 3-year FD under Rs 1 crore. The value is calculated based on quarterly compounding of interest. Some government-run banks offer super senior citizens (80 years and above) interest rates that are higher by another 30 basis points.
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Bank of Baroda offers an interest rate of 7.75 percent on three-year FDs. Among public sector banks, it offers the highest interest rate to senior citizens. A sum of Rs 1 lakh invested now will grow to Rs 1.26 lakh in three years.
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Axis Bank offers an interest rate of 7.60 percent to senior citizens on three-year FDs. A sum of Rs 1 lakh invested now will grow to Rs 1.25 lakh in three years.
HDFC Bank, ICICI Bank and Punjab National Bank offer interest rate of 7.50 percent on three-year FDs. A sum of Rs 1 lakh invested now will grow to Rs 1.25 lakh in three years.
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Canara Bank offers 7.30 percent interest to senior citizens on three-year FDs. A sum of Rs 1 lakh invested now will grow to Rs 1.24 lakh in three years.
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State Bank of India (SBI) offers an interest rate of 7.25 percent to senior citizens on three-year FDs. A sum of Rs 1 lakh invested now will grow to Rs 1.24 lakh in three years.
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Bank of India and Union Bank of India offer interest rate of 7 percent on three-year FDs. A sum of Rs 1 lakh invested now will grow to Rs 1.23 lakh in three years.
Indian Bank offers 6.75 percent interest to senior citizens on three-year FDs. A sum of Rs 1 lakh invested now will grow to Rs 1.22 lakh in three years.
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The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the Reserve Bank of India (RBI), guarantees investments in fixed deposits of up to Rs 5 lakh. Put simply, this means that your investments of up to Rs 5 lakh in a fixed deposit are completely secure.
Hiral Thanawala is a personal finance journalist with over 10 years of reporting experience. Based in Mumbai, he covers financial planning, banking and fintech segments from personal finance team for Moneycontrol.
