12 Things You Must Know About Senior Citizen Fixed Deposit Scheme In India

Are you a senior citizen looking to invest in a good FD scheme? You have come to the right place as there are a number of things you should be aware of before going in for a fixed deposit.

A fixed deposit needs no introduction due to its legendary status in India. From lucrative interest rates to security. A fixed deposit is the safest bet. Senior citizens are at an added advantage when it comes to FDs. The senior citizen FD rate is much higher. Even though the FD interest rate is falling in India, the senior citizen FD rate is still pretty attractive.

Before going in for a senior citizen fixed deposit scheme let us go through basics that all must be aware of.

• What exactly does an FD mean?: A fixed deposit is a popular and safe savings/investment instrument that is on offer via many banks or NBFCs. Here you deposit a certain amount according to your choice’s time frame and at particular FD interest rate. The senior citizen FD rate is always higher and a good choice for them when savings are in consideration.
• Senior citizen FD – are they that safe?: Fixed deposits are one of the safest methods of savings with ICRA even rating them as ‘MAA+’ which means very low credit risk.
• Who can invest in/apply for an FD?: Anyone falling under the following categories can go ahead and apply for a fixed deposit:
  • Unincorporated individuals
  • Anyone who is a resident
  • Even a trust or foundation can open an FD account
• Is there any minimum money requirement when going for an FD?: Only 5000 rs will enable anyone to open an FD account.
• What about the tenure of the FD?: The range available to a customer is vast, starting from just 7 days and going up to 10 years. The thing to note is longer the tenure higher is the FD interest rate.
• How is the interest of the FD accumulated?: Here, the customer has a choice of 2 options. Either go for the cumulative one, so you get the interest collectively at maturity. Or the other being non-cumulative where one can periodically take out the interest as per their choice. The advantage for senior citizens is that the senior citizen FD rate is much higher!
• How is the interest payment transfer handled?: The interest will get routinely deposited as per the choice taken of quarterly, monthly or yearly.
• What are the tax benefits for a senior citizen?: Under section 80TTB a senior citizen can reduce the tax charged on interest by up to 50000 rs on an FD under any bank.
• What are the loan options for an FD?: Being such a secure form of savings, any bank will be wholly willing to sanction a loan based on an FD.
• Fixed deposit options available to me before maturity?: FDs are very liquid as you can break one anytime in case of emergency need.
• Nomination facilities when it comes to an FD: Most banks will allow senior citizens to nominate persons of their choice in case of some future mishappening.
• Is there an option to open an FD online?: Yes, most banks nowadays have this easy and much less cumbersome process available.

After such a comprehensive study of the benefits, all that remains for you is to open that senior citizen FD!