Senior citizen fixed deposit schemes: Special benefits and features for elderly investors

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During your golden years, it is vital to ensure that your hard-earned savings are not stagnant. These fixed deposits for senior citizens are meant to grow their wealth while offering some special features.

These customised deposits can offer you higher interest rates, flexible payout options, and tax benefits. Let’s explore what makes these schemes special and how they can empower you in retirement.

What are senior citizen fixed deposits?

Senior citizen FDs refer to term deposits offered by banks and other financial institutions specifically designed for individuals aged 60 years and above. Some of the aspects of these fixed deposits include:

  • Higher interest rates: Interest rates that usually range between 0.25% and 0.65% higher than those of regular FDs can be used to increase returns on investments.
  • Flexible tenures: Aligning with your financial aspirations, this comes with time ranging from seven days to ten years.
  • Customisable payouts: Monthly, quarterly, half-yearly or yearly interest payouts ensure that income comes in whenever necessary.

Eligibility and documentation

To open a senior citizen FD, you need to be:

  • An Indian resident aged 60 or above.
  • Some banks may consider those over 55 who have taken voluntary retirement.

Documents you will typically need:

  • Identity proof: Senior citizen ID, PAN card, Aadhaar, passport, etc.
  • Address proof: Recent utility bill, bank statement, etc.

Features of senior citizen fixed deposits

Here are the top 4 features of senior citizen FD account:

  • Safety and security: Protecting your principal is key. FDs are insured by DICGC up to ₹5 lakhs, safeguarding your hard-earned savings.
  • Loan against FD: Should unexpected expenses arise, you can often take a loan against your fixed deposit, offering a convenient source of funds.
  • Auto-renewal: Avoid the hassle of manually renewing your FD. Many banks offer automatic renewal, ensuring your money continues to grow.
  • Premature withdrawal: While FDs are ideal for long-term growth, flexibility matters. Most bank accounts allow premature withdrawals, with a small potential penalty, in case you need your funds earlier.
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Benefits of senior citizen fixed deposits

Here are the 5 benefits of senior citizen FD accounts:

  • Guaranteed returns: Lock in your interest rate at the time of investment and know exactly how much you will earn upon maturity.
  • Steady income stream: Choose regular interest payouts – monthly, quarterly, or otherwise – to supplement your retirement income.
  • Ease of use: Senior-friendly processes with minimal paperwork make investing in FDs straightforward.
  • Liquidity: While not as liquid as a savings account, you can access your funds in case of genuine need.
  • Tax benefits: Senior citizen FDs may offer tax advantages under Section 80C of the Income Tax Act. Consult a tax advisor for more details.

Why consider a senior citizen FD?

If you want an investment that is low risk yet has guaranteed returns with little flexibility, then the senior citizen FD will be ideal. It is an extremely common way of protecting your savings and creating a secure financial safety net after retirement.

 

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