Banks offer resident senior an extra interest rate component over and above the standard interest rate applicable on term deposits up to Rs 2 crore. The additional rate component, applicable to resident senior citizen term deposits, varies between 0.25% to 1% over the rate applicable to normal rates depending on the bank.
Due to their low risk, FDs are the recommended investment option for senior citizens. Fixed deposit accounts can be closed anytime with or without penalty depending on the bank.
Here are banks that have hiked fixed deposit interest rates for senior citizens in August 2023.
Axis Bank is offering 3.5% to 8.05% FD interest to senior citizens on deposits maturing in 7 days to 10 years. These rates are effective from August 14, 2023. The highest interest rate of 8.05% is offered on tenure of 16 months to less than 17 months. For general customers, the bank is offering 3.5% to 7.3% FD interest. These interest rates will be applicable on callable term deposits below Rs 2 crore.
Federal Bank FD interest rate for senior citizens
According to the Federal Bank, senior citizens will receive interest rates of 8.07% on term deposits with a 13-month duration. The improved rates would only be offered for a short time, according to the bank press release. These rates are effective from August 15, 2023.
Canara Bank FD interest rate for senior citizens
Canara Bank is providing senior citizens with FD schemes with interest rates ranging from 4% to 7.75%. These rates are effective from August 12, 2023. For non-callable deposits of above rs 15 lakh, the bank offers interest rate between 5.35% to 7.90% on tenure of 444 days.Suryoday SFB offers interest rate for senior citizens between 4.50 percent to 9.10 percent for deposits less than Rs 2 crore with maturities ranging from 7 days to 10 years. The highest interest rate of 9.10 per cent is offered on tenure above 2 years to 3 years.
According to the Income Tax Act, a “senior citizen” is a resident individual who is 60 years of age or older at any time during the relevant fiscal year. Any senior citizen who is a resident individual in India can deduct up to Rs 50,000 from the interest income obtained on deposits (saving or fixed) during the relevant fiscal year.
