~ Samriddhi Singh Mahar
As the country grapples with inflation and economic uncertainty, senior citizens are seeking secure investment options to safeguard their savings. Fixed Deposits (FDs) have long been a preferred choice for this demographic, offering a steady and assured return. In a bid to attract and retain senior citizen customers, several top banks have revised their FD interest rates, providing a more attractive proposition for this segment.
Five prominent banks – ICICI Bank, Punjab & National Bank, Union Bank, Bank of India, and Karnataka Bank – have increased their senior citizen FD rates, offering a higher return on investment.
This move is expected to benefit millions of senior citizens who rely on FDs as a primary source of income. The revised rates vary across banks, with some offering up to 7.5% interest per annum, making them an even more attractive option for seniors seeking a low-risk investment avenue.
What are Fixed Deposits?
Fixed deposit (FD) is a type of investment in which an individual invests a lump sum amount for a specific period of time with a bank. The amount deposited in the FD earns interest at a fixed rate which is set at the time of the account opening. FD holders can choose to receive the interest earned either monthly, quarterly, half-yearly or annually as per their preference.
Fixed deposits are a great and secure way for senior citizens to invest their money as they can be easily opened and managed, offering flexibility and convenience for senior citizens. They can help save tax under Section 80 C of the Income Tax Act and provide guaranteed returns.
The following banks have recently revised their FD rates to provide a more competitive advantage in the market. Let’s see how they compare:
Bank of Baroda
Bank of Baroda has revised rates for pre pre-existing scheme known as Earth Green Term Deposits for deposits below 3 crores.
Interest rate range: 7.10 (applies to deposits of 1111 days and 1717 days.) – 7.75 (applies to 777-day deposit.)
- For deposits up to 3 years senior citizens get an extra 0.50% interest.
- For deposits between 3 and 5 years, senior citizens get an extra 0.65% interest (0.50% + 0.15%).
- For deposits between 5 and 10 years senior citizens get an extra 1.00% interest (0.50% + 0.50%).
Effective Date: September 5, 2024
Punjab National Bank (PNB)
PNB has revised the rates for two pre existing schemes:
Domestic/NRO Fixed Deposit Scheme
Interest Rate range:
- Senior citizens: 4% – 7.75%
- Super Senior Citizens : 4.3% – 8.05%
PNB Uttam (non-callable deposit scheme offering preferential rate)
Interest Rate range:
- Senior citizens: 5.05% – 7.80%
- Super Senior Citizens : 5.35% – 8.10%
Effective Date: August 1, 2024
Senior citizens get an additional 50 basis points on their interest rates, while super senior citizens receive an extra 30 basis points on top of what senior citizens are offered.
Union Bank of India
‘Union Sumvriddhi’ is an investment scheme that was introduced by Union Bank. The scheme has a tenure of 333 days and can be easily accessed on the Vyom app. If a retail term deposit under Rs. 3 crores is closed early after running for at least 7 days, the interest paid will be 1.00% less than the applicable rate at the time of deposit or the contracted rate, whichever is lower.
Interest rates:
- Senior Citizens: 7.90% p.a. (extra 50 basis points)
- Super Senior Citizens: 8.15% p.a. (extra 75 basis points)
Effective date: August 1, 2024
Bank of India
Bank of India has come up with a new FD scheme known as ‘Star Dhan Vriddhi’. The scheme has a tenure of 333 days and can be easily accessed by visiting any Bank of India branch or using the BOI Omni Neo App / internet banking. The bank also provides loans against FD along with a premature withdrawal facility.
Highest Interest Rate:
- Super Senior Citizens: 7.90% p.a.
- Senior Citizens: 7.75% p.a.
Effective Date: September 1, 2024
Karnataka Bank
Karnataka Bank has revised its fixed deposit interest rates for amounts below Rs 3 crore.
Under the new FD guidelines, resident senior citizens receive an additional 0.25% interest on domestic FD and ACC deposits up to ₹5 crore for tenures of 7 days to below 1 year, and an extra 0.50% for tenures of 1 year to 10 years. This benefit is not applicable to NRE, NRO, or FCNR(B) accounts.
Interest rate range: 3.75% – 8%
Effective Date: September 3, 2024
