Senior citizens often prefer to invest their money in schemes that offer guaranteed returns with low risk. People above the age of 60 can choose other options for investment, but for guaranteed returns, fixed deposits (FDs) are a safe option in their view. These options help senior citizens to get returns without affecting their investments due to market fluctuations.
Fixed deposit or FD is a safe means of investment. In this, investors get higher returns than a bank savings account. In FD, investors have to keep money with a bank, financial institution or post office for a fixed period at a pre-determined interest rate. In this option, banks give returns on the investment amount. Often, earnings are good on FDs with longer tenure.
Senior citizens generally get higher interest on FDs than people below 60 years of age. Banks offer about 0.50% more interest to investors aged 60 years or above as compared to the general public. They also get the benefit of tax exemption as interest on deposits kept in banks, co-operative banks or post offices is tax exempt under section 80TTB of the Income Tax Act. Senior citizens can claim a deduction of up to Rs 50,000. Apart from this, there will be no TDS deduction on interest payment up to Rs 50,000 in a financial year.
Also read: Fixed Deposits: Want more returns on FD, these banks are giving up to 9% interest
If you are above 60 years of age, you can invest in FDs and choose the tenure and amount based on your financial goals and your financial capacity. Instead of investing all your money in a single FD, you can open multiple FD accounts of different amounts and terms. Earning interest on more than one FD can help investors invest in schemes with higher returns.
Opening an FD account is very easy. Senior citizens can open these accounts by visiting any of their nearest bank branches. Apart from this, they can open an FD account online from the official website of the bank or financial institution from the comfort of their homes. It is often advised to open your FD account in the same bank where you have an existing relationship as it becomes hassle-free for you. In such a case, there is less paperwork to go through and fewer visits to banks are also required. However, senior citizens can open an account in the fixed deposit of any bank or financial institution in which they want to deposit their money.
Also read: Fixed deposits: After RBI’s change in bulk deposit rules, which bank’s FD is getting the highest interest? Check the full list
FDs can also be useful for investors when they need funds in an emergency situation. Some banks allow you to break FDs without any penalty.
Senior citizens are getting up to 9.50% interest on FD in June, see the list here
Before investing their money, investors should compare the FD rates and tenure of several banks. Only after doing this, it is better to choose a scheme with higher returns. By doing research before investing, one can earn good money from FD. Also, investors must read the terms and conditions before investing in any FD scheme. If you are 60 years of age or above and want to earn good money by investing your money in FD, then here a list of private, government and small finance banks has been shared for you. Which also includes details of the tenure of FD and the interest received these months. You can decide to invest your money by comparing the FD rates of these banks.
(Note : (The data related to interest rates on FDs of the banks listed above is till June 12. Paisa Bazaar.com has collected the data till this date from the websites of all the banks. Investors are advised to get updates from the branch or website of the concerned bank before choosing any of these FD schemes as these financial institutions keep changing the interest rates from time to time.)