Senior citizens will have fun! These 5 banks are giving more than 8% interest on 5 year FD, know the complete mathematics of maturity on depositing ₹ 10,000

After retirement, the priority of every senior citizen is to keep their hard-earned money completely safe and get regular and guaranteed returns on it. At a time when the country’s big government and private banks are offering around 7% to 7.25% interest to senior citizens on 5-year fixed deposits (FD), many Small Finance Banks (SFBs) approved by the Reserve Bank of India (RBI) are offering 8% to 8.50% annual interest to senior citizens for a longer period of 5 years. If an elderly investor fixes even a small amount of just ₹ 10,000 in these banks for 5 years, he gets huge returns on maturity on the basis of compounding interest.

Small Finance Banks offer additional interest of 0.50% to 0.75% to senior citizens (60 years or more) compared to general citizens to increase their deposit base:

1. Suryoday Small Finance Bank: On 5 year FD, this bank gives approx. 8.25% to 8.50% Is giving annual interest of up to Rs.

2. Shivalik Small Finance Bank: This bank offers long term and 5 year special FD to senior citizens. 8.25% to 8.50% Offers interest at the rate of Rs.

3. Jana Small Finance Bank: Jana SFB flats for senior citizens on FD with maturity of 5 years 8.00% Gives assured interest of Rs.

4. Utkarsh Small Finance Bank: This bank offers deposits to senior citizens for a tenure of 5 years (tax saver and regular deposits). 7.75% to 8.00% Is providing attractive returns of Rs.

5. Unity Small Finance Bank / DCB Bank: Unity Bank is offering interest up to 8.50% on special 501 day and long term FDs, while in the private sector, DCB Bank is also offering interest of 8.00% in the senior citizen category.

Interest on fixed deposits in Indian banks is calculated on quarterly compounding basis. If a senior citizen invests the principal amount of ₹10,000 for 5 years at an interest rate of 8% to 8.50%, his returns are as follows:

• At 8.00% per annum interest:

  
  

  • Principal: ₹10,000

  • Total interest received in 5 years: Approx ₹4,859

  • Total amount received on maturity: ₹14,859

• At 8.25% per annum interest:

  
  

  • Principal: ₹10,000

  • Total interest received in 5 years: Approx ₹5,042

  • Total amount received on maturity: ₹15,042

• At 8.50% per annum interest:

  
  

  • Principal: ₹10,000

  • Total interest received in 5 years: Approx ₹5,227

  • Total amount received on maturity: ₹15,227

That is, an investment of ₹ 10,000 grows more than 1.5 times (more than 52% net profit) in 5 years at a rate of 8.50%.

Many elderly people have a doubt whether it is safe to invest money in these banks. The answer is-Completely safe.

Small finance banks are also controlled and regulated by the Reserve Bank of India (RBI). Wholly Owned Subsidiary of RBI DICGC – Deposit Insurance and Credit Guarantee Corporation Under the rules of Deposit Insurance, the principal and interest amount of every depositor up to ₹ 5 lakh is fully insured in every bank. That is, even if a bank comes into financial crisis, the amount up to ₹ 5 lakh remains 100% protected under the guarantee of the government and RBI.

Many concessions are also given under the Income Tax Act for senior citizens:

• Exemption under Section 80C: If you choose a 5-year ‘Tax Saver FD’, tax exemption of up to ₹1.5 lakh can be availed under Section 80C of the Income Tax Act.

• Benefit of Section 80TTB: Senior citizens can earn up to ₹ 50,000 in a financial year completely tax-free on interest earned from bank FDs and savings accounts.

• TDS Deduction: If the total interest received from the bank in a financial year is less than ₹50,000, the bank does not deduct any TDS. If the total income does not fall in the taxable slab, seniors can avoid TDS deduction by submitting Form 15H.