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The first priority of every senior citizen is to get guaranteed returns every month or on maturity while keeping their savings completely safe after retirement. For those who want to earn maximum interest in a fixed period while staying away from the ups and downs of the stock market and mutual funds, the Special Retail Term Deposit scheme of the leading public sector bank Indian Bank has emerged as an excellent option.
The bank has kept the interest rates on its 555 days special FD (Ind Grow / Ind Green 555 Days) quite competitive compared to other competitors in the market. The biggest benefit of this scheme is being given to senior citizens aged 60 years or above and super senior citizens above 80 years of age, who are being given additional interest ranging from 0.50% to 0.75% compared to normal investors.
The category wise interest rates applicable on Retail Deposits below ₹3 Crore in the 555 days Special Fixed Deposit Scheme of Indian Bank are as follows:
| Category of Depositor | age limit | Annual Interest Rate (% pa) |
| General Public | under 60 years | 6.65% |
| Senior Citizens | 60 years to 80 years | 7.15% |
| Super Senior Citizens | 80 years and above | 7.40% |
(Note: FD interest in banks is compounded on quarterly basis, due to which the effective annual yield after the entire period of 555 days is more than the basic interest rate.)
This period of 555 days i.e. approximately 1 year, 6 months and 8 days (1.52 years) is considered to be the most suitable time to park capital for the medium term. If you choose the cumulative (re-investment) option, the estimated returns on different investment amounts will be as follows:
1. Return on investment of ₹1,00,000 (one lakh rupees)
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General Citizen (@6.65% pa):
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Total Interest Earned: Approx ₹10,550
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Maturity Amount: ₹1,10,550
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Senior Citizens (@7.15% pa):
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Total Interest Earned: Approx ₹11,380
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Maturity Amount: ₹1,11,380
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Super Senior Citizen (@7.40% pa):
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Total Interest Earned: Approx ₹11,800
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Maturity Amount: ₹1,11,800
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2. Return on investment of ₹5,00,000 (Rs five lakh)
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General Citizen (@6.65% pa):
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Total Interest Earned: Approx ₹52,750
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Maturity Amount: ₹5,52,750
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Senior Citizens (@7.15% pa):
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Total Interest Earned: Approx ₹56,900
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Maturity Amount: ₹5,56,900
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Super Senior Citizen (@7.40% pa):
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Total Interest Earned: Approx ₹59,000
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Maturity Amount: ₹5,59,000
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Senior citizens get an additional direct profit of around ₹4,150 to ₹6,250 compared to ordinary citizens on a deposit of ₹5 lakh.
Indian Bank gives its depositors flexible interest withdrawal options as per their financial preferences:
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Cumulative Plan (Cumulative FD): The interest received in this keeps getting added to the principal amount with quarterly compounding and after completion of 555 days, the entire money is received in lump sum. It is best suited for wealth growth.
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Non-Cumulative Plan (Monthly or Quarterly Payouts): If a pensioner or senior citizen needs regular cash flow for household expenses, medicines or electricity bills, they can opt for monthly or quarterly interest withdrawals. With an investment of ₹ 5 lakh at the rate of 7.15% every month, approx. ₹2,980 Regular income of Rs. 10,000 can be availed directly in the savings account.
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Government Bank Trust and DICGC Insurance: Indian Bank is a major scheduled commercial bank owned by the Government of India. RBI subsidiary DICGC (Deposit Insurance and Credit Guarantee Corporation) Under the rules of the Bank, the principal amount and interest of every customer up to ₹ 5 lakh is 100% insured and completely safe.
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Loan and Overdraft Facility: There is no need to break the FD in case of emergency. Customers can avail an instant loan or overdraft up to 90% of their 555 day FD deposit amount.
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Premature Withdrawal: If required, premature withdrawal can also be done with normal penalty rules of the Bank (0.50% to 1% deduction from the applicable rate).
The interest earned on bank FD is taxable and is added to the annual income of the depositor and is taxed as per his income tax slab:
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Exemption for senior citizens (Section 80TTB): Citizens aged 60 years and above on bank interest income in a financial year under Section 80TTB of the Income Tax Act Direct tax exemption up to ₹50,000 Is available.
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TDS limit: Banks deduct 10% TDS only if the interest in a financial year exceeds ₹1,00,000 for senior citizens and ₹50,000 for general citizens.
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Submit Form 15H: If the total annual taxable income of a senior citizen is less than the basic exemption limit and no tax liability is incurred, they can deposit their income in the bank at the beginning of the financial year. Form 15H (General citizens can make TDS deduction completely zero by submitting Form 15G).
It is very easy to open an account in this special 555 days scheme of Indian Bank:
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Net Banking/IndOASIS Mobile App: If you already have a savings account in an Indian bank, login to the ‘IndOASIS’ mobile app and go to the ‘Open Term Deposit’ section. Select ‘Special 555 Days Scheme’ there and book FD in 2 minutes without any paper formalities.
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By visiting a bank branch: New customers can open a 555 days FD account by directly visiting the counter of their nearest Indian Bank branch with Aadhar card, PAN card, two passport size photographs and check book.
This special limited period scheme is a great opportunity for senior citizens who want to get maximum yield on their savings in a government bank without any risk.