Investment Plans 479 views July 3, 2021

Senior Citizen Fixed Deposits

Fixed deposits, which offer fixed income over the invested capital, remain the most sought-after investment option amongst senior citizens. As the risk-taking capabilities remain too low for senior citizens, they prefer to invest in products offering fixed returns. Senior Citizen Fixed Deposits are offered by both banks and non-banking finance companies (NBFCs) at varied interest rates based on the deposit amount and tenure. For more information about Senior Citizen Fixed Deposits, read this page further.

Features & Benefits of Senior Citizen Fixed Deposits

These fixed deposits come loaded with the following benefits to interest senior citizens.

Higher Rate of Interest – Senior Citizen Fixed Deposits come with an additional interest rate of 0.25-0.50% over the one offered to people aged less than 60 years. The higher interest rate increases the scope for additional returns and helps them lead a stress-free retirement life. Senior citizens can earn interest up to 6.50-7.50% per annum in the current scenario.

Compound Interest – Lenders calculate the fixed deposit amount interest on a compounding basis. It’s up to banks and NBFCs to decide the compounding frequency from monthly, quarterly, half-yearly and yearly options. If we see the current scenario, the interest is compounded mostly on a quarterly basis. The compounding interest will help you earn more by generating returns not only on the fixed deposit amount but also on the interest you earn over the same. So, if you keep the money for long in fixed deposits, the scope for an increased surplus amount is more.

Flexible Investment Tenure – Senior citizens can open a fixed deposit account for a minimum of 7 days to a maximum of 10 years. So, one can thus choose the fixed deposit tenure wisely and to the extent they want.

Minimum Deposit Amount Required – The minimum amount required for fixed deposits can vary from one lender to another. While some lenders can allow you a fixed deposit for an amount as low as INR 1,000, others would want you to deposit a minimum of INR 5,000 or so.

No Limit on the Maximum Deposit Amount – While senior citizens need to deposit the minimum amount required to open a fixed deposit, they are free to put as much money as they want in fixed deposits since these do not come with a maximum limit.

Loan Against Fixed Deposits – You can also get a loan against fixed deposits and that too at interest rates lower than that of unsecured loans. The fixed deposit will act as a security cover for the loan and, therefore, the interest rate lessens. However, the loan amount would be dependent on the fixed deposit value. Typically, banks finance around 80-90% of the fixed deposit value as a loan.

Top Banks/NBFCs for Senior Citizen Fixed Deposits

We have given you a choice of banks/NBFCs that offer the best fixed deposits for senior citizens. While selecting the best, we have focused on the earning prospects and the reputation of lenders. Take a look at the list below and see which one meets your needs the best way.

BanksInterest Rate (In Per Annum)
State Bank of India (SBI)3.40%-6.20%
HDFC Bank3.00%-5.15%
ICICI Bank3.00%-5.85%
Axis Bank2.50%-6.50%
Bank of Baroda (BoB)3.30%-6.10%
Kotak Mahindra Bank3.00%-5.80%
YES BANK3.75%-7.25%
IndusInd Bank3.25%-7.00%
Punjab National Bank3.00%-5.75%
Bank of India2.85%-6.65%
Canara Bank2.95%-6.50%
LIC Housing Finance5.25%-5.75%
PNB Housing Finance6.40%-6.95%
Muthoot Finance Ltd.7.75%-8.25%
Mahindra & Mahindra Financial Services Ltd.5.85%-6.70%

Note – The last four lenders come with a maximum deposit tenure of five years. Whereas the fixed deposits for those above can last for a maximum of 10 years.

How to Open Senior Citizen Fixed Deposit Accounts?

Senior Citizen Fixed Deposits can be opened online as well as at the nearest branch of the bank or NBFC. People aged above 60 years need to fill and sign a fixed deposit application form and submit it along with their KYC documents to the bank/NBFC wherever they want to open the said account. And if someone wants to open a fixed deposit at a bank where they already have a savings account, they may not need to submit KYC documents as the bank would already have the same.

Documents Required 

Submit the following documents when opening a fixed deposit at banks/NBFCs.

  1. A duly filled and signed fixed deposit application form
  2. Photo ID Proof – PAN Card/Voter ID/Passport/Aadhaar Card/Driving License
  3. Address Proof – Voter ID/Passport/Aadhaar Card/Driving License/Electricity Bill/Telephone Bill
  4. Form 60 (In case of no PAN Card)

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