Senior citizens are worried: These banks are getting bumper interest of up to 8.50% on FD, know where you will get the highest profit and complete security guarantee.

This is considered to be the most opportune time for senior citizens and retired people across the country to get maximum returns while keeping their life-long hard-earned money safe. Amid indications of possible softening of interest rates in the future in the financial markets, many banks continue to offer attractive interest rates on special tenure fixed deposits (FDs). Citizens aged 60 years and above are generally getting additional interest benefit of 0.50% (50 basis points) and Super Senior Citizens above 80 years of age are getting additional interest benefit of 0.65% to 0.75% compared to regular customers. These special schemes of selected banks have become a source of huge profits for investors who want secure income and stay away from market fluctuations.

Highest returns among small finance banks: interest offering up to 8.50%

If you want maximum returns on your investment, Small Finance Banks (SFBs) are leading the way right now. Unity Small Finance Bank is offering the highest interest rate of up to 8.50% to its senior citizen customers on special tenure of 1001 days and 1 year 4 months 15 days. Similarly, Suryoday Small Finance Bank is offering interest at the rate of 8.50% to senior citizens on fixed deposits of 5 years and 8.25% on fixed deposits of 30 months. Apart from this, Shivalik Small Finance Bank, Jan Small Finance Bank (8.30%) and Utkarsh Small Finance Bank (8.25%) are also offering attractive rates for medium tenure of 2 to 3 years.

Comparison of FD interest rates: Know how much return is being given in which bank

For the convenience of senior citizens, a comparison of maximum interest rates and investment tenure of different banks is given in the table below:

Stance of major commercial and government banks

For investors who prefer to invest money in established big commercial banks instead of small finance banks, private sector IndusInd Bank and Yes Bank are offering returns of up to 7.75%. The rates for senior citizens in the country’s largest public sector banks State Bank of India (SBI), Bank of Baroda and Punjab National Bank (PNB) are stable in the range of 7.05% to 7.30%. Bank of India and Indian Overseas Bank are offering benefits of more than 7.50% to super senior citizens above 80 years of age by giving an additional premium of 0.65% to 0.75% on certain tenures.

DICGC’s ₹5 lakh security guarantee and smart investment strategy

This question arises in the minds of many investors whether the capital deposited in small finance banks is safe. All scheduled commercial and small finance banks come under the purview of Deposit Insurance and Credit Guarantee Corporation (DICGC) under the regulations of the Reserve Bank of India (RBI). Under this, the principal and interest amount up to ₹ 5 lakh per depositor in every bank is completely insured and protected. Financial advisors suggest that instead of investing their huge capital in a single bank, senior citizens should invest it in FD Laddering Strategy by dividing it into tranches of up to ₹5 lakh in 2 to 3 different banks. This provides maximum security as well as the benefit of high interest.

Benefit of tax exemption (Section 80TTB) and regular income payout

Under Section 80TTB of the Income Tax Act, senior citizens get tax exemption on interest earned from bank FDs and savings accounts up to ₹50,000 in a financial year. If your total annual income is less than the taxable limit, deposit it in the bank at the beginning of the financial year to avoid TDS deduction. Form 15H Must be deposited. Additionally, investors can opt for ‘Monthly or Quarterly Interest Payouts’ to manage monthly household expenses, while those seeking capital appreciation can choose the ‘Cumulative’ option.