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 a 4 percent low for over a year and half now. Most banks have low interest rates on FDs. But smaller private banks offer interest rates of up to 7 percent on three-year FDs for senior citizens as per data compiled by BankBazaar. Here are these private banks offering the best interest rates on three-year FDs for senior citizens.
Bandhan Bank and Yes Bank offer 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.
RBL Bank offers 6.80 percent interest on three-year FDs for senior citizens. Rs 1 lakh invested grows to Rs 1.22 lakh in three years.
IDFC First Bank and IndusInd Bank offers 6.50 percent on three-year FDs for senior citizens. Rs 1 lakh invested grows to Rs 1.21 lakh in three years.
DCB Bank offers 6.45 percent on three-year FDs for senior citizens. Rs 1 lakh invested grows to Rs 1.21 lakh in three years.
Axis Bank offers 6.05 percent on three-year FDs for senior citizens. Rs 1 lakh invested grows to Rs 1.19 lakh in three years.
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.
The data on FDs is as of 9 February 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.
