Senior citizens should invest a part of their savings in fixed deposits. It offers liquidity and ensures interest income periodically. The Reserve Bank of India (RBI) has kept the key repo rate unchanged at 4 percent for about two years now. Most leading banks have low interest rates on FDs. There are small finance banks and new private banks that offer interest rates of up to 7.5 percent on three-year FDs for senior citizens as per data compiled by BankBazaar. Here are the banks offering the best interest rates on three-year FDs for senior citizens.
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Suryoday Small Finance Bank offers 7.50 percent interest on three-year FDs for senior citizens. Among small finance banks, this bank offers the best interest rates. A sum of Rs 1 lakh invested grows to Rs 1.25 lakh in three years.
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Ujjivan Small Finance Bank offers 7.40 percent interest in three-year FDs for senior citizens. Rs 1 lakh invested grows to Rs 1.25 lakh in three years.
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AU Small Finance Bank offers 7.25 percent interest in three-year FDs for senior citizens. Rs 1 lakh invested grows to Rs 1.24 lakh in three years.
The small finance banks and 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 March 30, 2022, 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) private sector banks and small finance 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.
