Senior citizens’ batting: Bumper interest up to 7.50% on 666 days special FD, know which banks are giving the highest benefits

New Delhi. Regular income and capital security after retirement is the first priority of every elderly citizen. Bank fixed deposits (FD) have always been the most reliable investment option for senior citizens who are averse to the ups and downs of the stock market and the risks of mutual funds. The ‘666 days’ special term deposit scheme (Special FD Scheme) of public and major scheduled banks is becoming very popular for the elderly who want safe returns. Punjab National Bank (PNB) and other leading banks are offering attractive annual interest rates ranging from 7.00% to 7.50% to senior and super senior citizens on FDs with a special maturity period of 666 days.

After keeping the repo rate stable by the Reserve Bank of India (RBI), most of the banks have kept the interest rates at the top level on special tenures (Special Tenures like 444 days, 666 days) with medium term of 1 to 3 years. Its main objective is to attract medium term retail deposits in the bank. If you are also looking for a scheme with safe and guaranteed returns for your parents, grandparents or yourself, then this special 666 day FD scheme can become a strong means of increasing your savings rapidly.

Different interest rate slabs have been set by banks for general citizens, senior citizens and super senior citizens on tenure of 666 days:

• General Citizen (below 60 years): On a normal FD of 666 days, customers get interest ranging from about 6.50% to 6.60%.

• Senior Citizens (60 to 79 years): Banks offer additional interest of 50 basis points (0.50%) to senior citizens compared to the normal rates. Under this, they get returns ranging from 7.00% to 7.10% per year on FD of 666 days.

• Very Senior Citizens (80 years or more): For super senior citizens, banks add an additional benefit of 30 to 50 basis points, taking their effective interest rate to 7.30% to 7.50%.

• Ex-Staff Senior Citizens: If a senior citizen is a retired employee of the concerned bank, he gets an additional staff privilege of 100 to 150 basis points, which takes the interest rate beyond the 7.50% level.

Some basic eligibility conditions have been prescribed by the Bank to avail the benefits of this special fixed deposit scheme:

• Age Limit: To avail the benefit of senior citizen category, the age of the account holder should be minimum 60 years at the time of opening the account. For Super Senior Citizen category, age must be 80 years or more.

• Resident Indian: This scheme is mainly available to all individual resident Indians.

• Deposit Limit: This retail interest rate of 666 days is applicable for total deposits ranging from ₹2 crore to ₹3 crore.

• Joint Account: If husband and wife open a joint account, then the increased senior citizen interest rate will be applicable on the account only if the age of the primary account holder is more than 60 years.

Keeping in mind the financial needs of the elderly, banks have provided many convenient interest payment options in this scheme:

• Cumulative Option (Cumulative / Reinvestment): People who do not need money immediately can choose the cumulative option. In this, the interest gets added to the principal amount every quarter by compounding and on completion of 666 days, a large lump sum amount is received on maturity.

• Non-Cumulative Option (Monthly / Quarterly Payout): Pensioners or elderly people who need regular income every month or every three months for medicines, ration and household expenses can choose monthly or quarterly income plans. With this, the interest money is directly transferred to their savings account.

It is important for senior citizens to be aware of the special rules of the Income Tax Department regarding interest on FD:

• Exemption of ₹50,000 under Section 80TTB: Under Section 80TTB of the Income Tax Act, senior citizens get direct tax exemption of up to ₹ 50,000 on the total interest income from bank and post office deposits (FD and savings) in a financial year.

• TDS deduction limit: If the total interest income of a senior citizen exceeds ₹50,000 in a financial year, banks deduct TDS at the rate of 10%.

• Avoid TDS by submitting Form 15H: If the total annual income of an elderly person is less than the basic limit of tax exemption and there is no income tax liability, then he can fill ‘Form 15H’ and submit it to the bank branch at the beginning of the financial year, from which the bank will not deduct any TDS on the interest.

The process to invest in this special 666 day fixed deposit scheme is very simple:

• Mobile App and Net Banking at Home: If you already have an account with the bank, then login to the bank’s mobile app (like PNB ONE) or internet banking. There go to ‘Fixed Deposit / Term Deposit’ section, click on ‘Open FD’, select ‘666 Days’ in tenure and choose your preferred payment option to book FD in 1 minute.

• By visiting the nearest bank branch: New customers can open a Senior Citizen Special FD Account by visiting their nearest bank branch and giving two passport size photographs, Aadhar Card, PAN Card and age certificate.

This special 666 day fixed deposit scheme is a safe, stress-free and high-return medium for senior citizens who want to earn maximum guaranteed returns on their hard-earned money while keeping it completely risk-free.