Senior citizen fixed deposits offering up to 9.1% interest rates
Senior citizen fixed deposits are investment instruments specifically designed for people above 60 years or above. This product offers several benefits tailored to the needs of senior citizens, and it’s essential to consider various factors when investing in them.
Firstly, interest rates play a crucial role in determining the returns on senior citizen fixed deposits. Typically, these deposits offer higher interest rates compared to regular fixed deposits, making them an attractive option for retirees seeking stable income. However, it’s vital to stay updated on prevailing interest rates to ensure that the investment remains competitive.
Adhil Shetty, CEO, Bankbazaar.com, says, “Senior citizens typically earn an additional 0.50% interest on their FDs compared to regular FDs. This can make a significant difference in the total earnings, especially for longer tenures. For example, if a regular FD offers 6% interest for a 5-year tenure, a senior citizen FD might offer 6.50% interest for the same tenure.”
Another important aspect to consider is the tenure of the fixed deposit. Senior citizens should choose a tenure that aligns with their financial goals and liquidity requirements. Shorter tenures may offer flexibility, while longer tenures can provide higher interest rates.
Also Read: Short Term FD vs Long Term FD: 5 tips for selecting the right fixed deposit tenure
Tax implications should be taken into account as well. While the interest earned on fixed deposits is generally taxable, senior citizens are eligible for a higher exemption limit. It’s advisable to be aware of the tax rules and consider the after-tax returns when making investment decisions.
Liquidity is a crucial factor, especially for seniors who may need
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