Bumper interest up to 8.50% for senior citizens on FD of 501 days: How much return will you get on depositing ₹ 5 lakh? understand the full story

Fixed Deposit (FD) has always been the first choice for investors, especially senior citizens, seeking safe and guaranteed returns. In recent times, many small finance banks have revised their deposit rates, in which Unity Small Finance Bank’s 501 days special FD scheme is in the news.

For this special period (501 days i.e. approximately 1 year 4 months and 15 days) the bank is offering 8.00% additional rate to general customers and 50 basis points additional to senior citizens i.e. 8.50% per annum Is paying interest at the rate of Rs. It has emerged as an attractive option for senior citizens looking for secure and fixed income away from the ups and downs of the stock market.

If a senior citizen invests in this 501 days special FD ₹5,00,000 (Rs 5 lakh) If a lump sum investment is made, then the maturity calculation on the basis of Quarterly Compounding is as follows:

Note: Banks add interest to the principal on quarterly basis (Reinvestment Plan). If senior citizens want to get interest in their account like regular pension on quarterly or monthly basis (Non-Cumulative Option), then they will get total interest of around ₹58,300 to ₹59,000 as simple interest.

Senior citizens get two major options to receive interest under this scheme:

• Cumulative Option: If you do not need regular cash, the interest amount gets added to the principal amount every 3 months. This gives a lump sum amount of approximately ₹ 5.61 lakh on maturity.

• Non-Cumulative Option: If you want regular income for your daily expenses or medicines, you can take interest payments into your savings account on a monthly or quarterly basis.

1. DICGC Insurance Protection (Protection Guaranteed): Under ‘Deposit Insurance and Credit Guarantee Corporation’ (DICGC), a subsidiary of the Reserve Bank of India (RBI), each account holder’s principal and interest are fully insured and protected up to a maximum of ₹ 5,00,000. An investment of ₹5 lakh falls within this safe limit.

2. TDS and Tax Rules: Under Section 194A of the Income Tax Act, TDS is not deducted on the interest received by senior citizens from bank FDs up to ₹ 50,000 in a financial year. Since the total interest on ₹5 lakh in 501 days will be around ₹60,000 and it will be divided over two different financial years, so if your total annual income is in the tax-free bracket, you Form 15H You can avoid TDS deduction by depositing.

3. Premature Withdrawal: If the FD is broken due to any emergency before completion of 501 days, the bank can deduct a penalty of up to 1% as per rules.