5 fixed deposit options for senior citizens

Top banks in the country including SBI have slashed Fixed Deposit rates. As a senior citizen, here are some deposit options you could consider.

Kavya Balaji Oct 15, 2019

FD for senior citizensBanks have been slashing their fixed deposit rates. Now getting a 6%
 interest for your fixed deposit is tough. Many investors, especially senior citizens, are fretting over this. If all commercial banks slash their deposit rates, what are your options?

Typically, new banks and small finance banks offer higher deposit interest rates because they need customers. Here are some of the banks that offer good rates for senior citizens. You could consider deposits offered by these banks.

Also read: 4 steps to avoid PMC Bank type fiasco and to keep your savings and investments relatively safe

IDFC First Bank

With interest rates being offered going up to 8.5%, you should consider domestic deposits offered by this bank. Deposits with a tenure of one year and up to two years will earn 8.5% for senior citizens. Deposits of up to five years will give you 8%.

Want to choose long term deposit of up to 10 years? You can earn as much as 7.75%. For shorter tenure deposits of 180 days to 1 year, the interest rate is 7.5%. The interest rates are applicable for all retail deposits of up to Rs 2 crore.

Note that interest rates for deposits of up to 180 days are on a simple interest basis. Interest on deposits with tenor of above 180 days is compounded on quarterly basis.

If you want recurring deposits (RD), you can get an interest of up to 7.75%. For 120 days RD, the interest is 7.5%, while deposits with tenure of 39 months to 90 months will earn 7.70%. Want a shorter tenure deposit of 12 months to 36 months? You could get an interest of 7.75%. Deposit pay-out will be only on maturity and quarterly compounding will be applicable for the deposit. All rates are from 21st August, 2019.

Also read: Have extra cash? Park them in debt funds than in fixed deposits

Bandhan Bank

As a senior citizen, you could get up to 8.15% interest for fixed deposits with this bank. This is with effect from September 16, 2019. Long term deposits of five years to 10 years will give you an interest of 8% per year while for deposits of three years to five years you get an interest rate of 8.10%. If you opt for deposits with tenor of two years to three years, you can get an interest of 8.15%.

For deposits with tenor of one year to two years you could earn 8% every year. Want one of the best interest rates for your short term deposit? Then, you can consider the six months to one year deposit. You earn 7.55% for this one. These deposit rates are for all retail domestic deposits of less than Rs 2 crore. The minimum deposit amount starts at Rs 1,000 and you can invest in multiples of Re 1.

DCB Bank

This bank too gives you up to 8.5% for your deposits. If the 36 months deposit gets you 8.5%, longer tenor deposit of 36 months to 60 months fetch you a little less rate of 8.25% every year, while a 120 months deposit could get as much as 7.75% as interest.

With DCB bank, you could get more than 8% for all deposits that are more than 15 months and less than 60 months. The most interest for a short tenor deposit is 8.3% per year for the 18 months deposit. Want a shorter tenor deposit of less than 12 months? You can get 7.35% for the 6 months to 12 months deposit. If you invest for a year, you can get 7.5%. You could get as much as 6.65% for the 90 days deposit. All interest rates are for retail deposits of less than Rs 2 crore and are applicable from 18th September, 2019.

The best thing about DCB bank deposits is the premature penalty. While most banks charge 1% as penalty for premature withdrawal of your deposit, DCB bank charges just 0.5% as premature withdrawal penalty. This is applicable for all deposits with tenor of more than 14 days. So, as a senior citizen you get the normal interest rate applicable to other depositors even when you prematurely close your deposit.

Also read: How to make better returns from idle money lying in your savings account

AU Small Finance Bank

This bank was started as a vehicle finance company and became a small finance bank in 2017. It was listed as a Fortune India 500 company in 2018. You will get over 7% interest per year for all deposits of more than three months. AU Small Finance Bank offers the highest interest rate of 8.27% per year for the 24 months to 36 months deposit. Longer tenor deposits of 45 months to 60 months and 60 months to 120 months will give you 8% and 7.75% respectively.

Looking for shorter tenor deposits? You could get 8.13% for the 12 months to 15 months deposit. The 6 months to 12 months deposit will give you 7.5% and the 3 to 6 months deposit will earn you 7%. These rates are applicable from 1st October 2019. You can avail the monthly pay-out option for your deposit if you choose any deposit with a tenor of more than 3 months.

Also read: Top banks like SBI, HDFC Bank lower FD rates; what options do you have?

RBL Bank

Formerly known as Ratnakar Bank, this bank has been there since 1943. The highest interest rate offered is 8.15% for the 24 months to 36 months deposit. Want longer tenor deposits? You could get 7.85% per year for the 36 months to 60 months deposit and 8% for the 60 months to 120 months deposit.

The unique feature about this bank is that unlike other banks who provide deposits of only up to 10 years, you can get to invest in deposits with tenor of more than 10 years and up to 20 years in RBL. The interest rate for this deposit is 7.5%.

Looking to invest in shorter tenor deposits? The 12 months to 24 months deposit will give you 8.10% per year. Deposits of 181 days to 364 days will earn you 7.25%. The 91 days to 180 days deposit comes with an interest rate of 7%. These rates are with effect from September 24, 2019 and are applicable to all retail deposits of less than Rs 2 crore.

FD interest rates options for senior citizens

Deposit Tenor IDFC First Bank Bandhan Bank DCB Bank AU Small Finance Bank RBL Bank
7-14 days 4.50% 4.25% 5.90% 5.75% 5.50%
15-29 days 5.50% 4.75% 6.15% 6.50% 6.00%
30-45 days 6.75% 4.75% 6.15% 6.50% 6.00%
46-90 days 7.00% 4.75% 6.65% 6.50% 6.75%
91-180 days 7.25% 5.25% 6.85% 7.00% 7.00%
181 days – 1 year 7.50% 7.55% 7.35% 7.50% 7.25%
1 year – 2 years 8.50% 8.00% 8.25% 8.00% 7.25%
2 years – 5 years 8.00% 8.10% 8.25% 8.00% 8.15%
5 years – 10 years 7.75% 8.00% 7.75% 7.75% 8.00%
10 years – 20 years NA NA NA NA 7.50%

*Information sourced from respective banks’ websites.

Though these are some of the banks with high interest rates, it is best to carefully read the terms and conditions before you choose to invest in any of these deposits. You can calculate the effective yield for the deposits to find out which one will give you greater returns. Need help? Try our Fixed Deposit (FD) calculator. You can find out the amount of interest earned and maturity amount for your deposit.

Disclaimer: This article is for general information and reading purposes only. They do not constitute any guidelines or recommendations on any course of action to be followed by the reader. The views are not meant to serve as a professional guide/investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or investment.

Kavya Balaji

Kavya Balaji is a senior contributing writer with RupeeIQ. With more than 14 years of experience in the finance space, Kavya loves everything to do with personal finance. She feels financial literacy is important for every household and likes to stick to simple language for explaining personal finance stories. She is a consultant with investment management companies. In spare time, she reads murder mysteries.

Subscribe to our newsletter

Envolpe image

Want to grow your money?

Subscribe & keep learning!

 ⓘ Find the best performing mutual funds Explore

Mohammed Haseeb