Financiers Are Offering High FD Rates Above 7% For Senior Citizens

Despite having historically low Fixed Deposit rates, FD issuers have now started raising FD rates for senior citizens since the RBI hiked key interest rates.

Senior Citizen Fixed Deposit

Source : Bajaj Finserv

Retirement, while inevitable, doesn’t mean your income needs to stop growing. Everybody, whether self-employed or salaried, must secure his or her life with a regular income as well as accumulated wealth for post-retirement life.

A fixed deposit, or FD, is one of the most common types of savings instruments for senior citizens and retired individuals. It is a savings plan provided by various banking and non-banking institutions. An FD is one of the safest and easiest instruments to save money for future use, particularly for senior citizens who are looking to generate periodic income from their retirement corpus.

Let's check out some features and benefits of Senior Citizen Fixed Deposit:

• Financial security

Senior Citizen Fixed Deposit provides a good financial backup post retirement as one can opt for monthly payouts. You can opt for a non-cumulative Fixed Deposit scheme, thereby earning interest on a monthly basis. This will prove to be a solid backup plan to meet monthly expenses by choosing the monthly interest payout option.

• Risk-free

The returns on Fixed Deposit are not affected by changes in the economy or market fluctuations, making Fixed Deposits a low-risk savings option for senior citizens.

• Loan Against FD

Most financial institutes offer a credit facility in the form of a loan or overdraft to those who have saved with a Fixed Deposit. One can, hence, borrow funds at an affordable rate of interest without withdrawing Fixed Deposit prematurely if you need funds immediately. When in need, you can borrow as much as 75% of your Fixed Deposit amount.

• Emergency Fund

Using the emergency credit scheme, you can prematurely withdraw your Fixed Deposit to fund an urgent need or financial commitment. However, a small penalty may be charged on prematurely withdrawing a Fixed Deposit. Thus, it is better to avail a loan against FD, instead of withdrawing from your fixed deposit, prematurely.

Banks Offering High FD Rates Above 7% for Senior Citizens

 Here is a look at a few banks that offer inflation-beating FD returns for senior citizens: 

1. Ujjivan Small Finance Bank

Ujjivan Small Finance Bank offers highly lucrative FD rates for senior citizens that can help them grow their money. For a period of 18 months and 1 day to less than 24 months, the bank gives an interest rate of 7.30 percent and for a period of 15 months and 1 day to 18 months, the interest rate for senior citizens is 7.70 percent. Ujjivan Small Finance Bank offers the highest interest rate of 7.20 percent for a tenure of 24 months to 1 day to 989 days and 7.80 percent for a tenure of 24 months. For tenures of 990 days and 42 months, 1 day to 60 months, the bank offers a highly rewarding interest rate of 7.40 percent. 

2. Utkarsh Small Finance Bank

This bank is amongst those that offer the highest interest rates for senior citizens. The highest FD rates for senior citizens at the rate of 7.75 percent are offered for a period of 700 to 1000 days. For a time period ranging from 365 to 699 days, it provides 7.40 percent, and 7.25 percent for a period ranging from 1001 to 5 years. 

3. Fincare Small Finance Bank

For tenors of 59 months 1 day to 66 months, and 36 months 1 day to 42 months, the Fincare Small Finance Bank offers an interest rate of 7.50 percent. And for a period ranging from 15 months 1 day to 18 months, the bank offers a 7.40 percent interest rate for senior citizens. 

4. Suryoday Small Finance Bank

Suryoday Small Finance Bank offers an even higher interest rate for the elders and retirees. For a period of 999 days, the interest rate offered is 7.99 percent, and for a 5-year period the interest rate is 7.25 percent. It offers a 7.50 percent interest rate for periods ranging from 2 years to 998 days, and 1000 days to 3 years. 

5. Equitas Small Finance Bank

For a tenure of 888 days, the Equitas Small Finance Bank offers an interest rate of 7.50 percent to all senior citizens. From 889 days to 3 years, the interest rate offered is 7.40 percent. There is a 7.10 percent interest rate available for terms of one year to 18 months at the bank. 

6. AU Small Finance Bank

The bank offers the highest interest rate of 7.40 percent for periods ranging from 24 to 45 months and 60 to 120 months. Additionally, it provides 7.10 percent on a lower period ranging from 12 months and 1 day to 15 months. 

7. ESAF Small Finance Bank

The bank offers the highest interest rate of 7.75 percent for terms of two to three years. The bank offers 7.10 percent on the tenor of 1 year and 1 day to less than 2 years.

Interest Rate Disclaimer: The aforementioned FD rates of interest are valid as of July 21, 2022, and may be subject to change as per bank announcements.

Conclusion

It is essential for senior citizens to plan ahead so as to enjoy their retirement years. To do so, senior citizens should be aware of the FD rates for senior citizens and ensure a steady stream of income so that they can live their retirement years to the fullest.

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