Fixed Deposits, or FDs are one of the most popular savings options among senior citizens. This is because FDs are not swayed by market conditions, meaning they come with very little risk. The returns on FDs are also assured and predetermined.
Additionally, it’s also quite flexible, you can choose your preferred amount and tenure. You can also choose between a cumulative or non-cumulative FD depending on whether or not you’d like a regular source of income. Another reason why FDs are so popular among senior citizens is because they usually get additional FD interest rates over and above the existing rates. This can range anywhere from 0.25% to 0.50%, depending on the issuer.
In this article, we’ll explore senior citizen FDs and why they’re a great savings option. Firstly, we’ll understand how FDs with leading financial institutions in India will grow over a period of time. This will help you understand the returns that you can expect with FD savings and plan your savings better.
₹1 Lakh FD for 1 Year
| Financial Institution | FD Amount | Interest Rate | Interest Earned | Maturity Amount |
| Bajaj Finance | ₹1,00,000 | 7.65% | ₹7,924 | ₹1,07,924 |
| Axis Bank | ₹1,00,000 | 7.50% | ₹7,763 | ₹ 1,07,763 |
| Kotak Mahindra Bank | ₹1,00,000 | 7.60% | ₹7,870 | ₹1,07,870 |
| SBI | ₹1,00,000 | 7.30% | ₹7,549 | ₹1,07,549 |
| HDFC Bank | ₹1,00,000 | 7.10% | ₹7,336 | ₹1,07,336 |
| Shriram Finance | ₹1,00,000 | 7.84% | ₹8,128 | ₹1,08,128 |
₹1 Lakh FD for 3 Years
| Financial Institution | FD Amount | Interest Rate | Interest Earned | Maturity Amount |
| Bajaj Finance | ₹1,00,000 | 8.30% | ₹28,164 | ₹1,28,164 |
| Axis Bank | ₹1,00,000 | 7.75% | ₹26,081 | ₹1,26,081 |
| Kotak Mahindra Bank | ₹1,00,000 | 7% | ₹1,23,293 | ₹23,293 |
| SBI | ₹1,00,000 | 7% | ₹23,293 | ₹1,23,293 |
| HDFC Bank | ₹1,00,000 | 7.50% | ₹25,145 | ₹1,25,145 |
| Shriram Finance | ₹1,00,000 | 8.45% | ₹28,738 | ₹ 1,28,738 |
₹1 Lakh FD for 5 Years
| Financial Institution | FD Amount | Interest Rate | Interest Earned | Maturity Amount |
| Bajaj Finance | ₹1,00,000 | 8.30% | ₹51,221 | ₹1,51,221 |
| Axis Bank | ₹1,00,000 | 7.75% | ₹47,146 | ₹1,47,146 |
| Kotak Mahindra Bank | ₹1,00,000 | 6.70% | ₹39,664 | ₹1,39,664 |
| SBI | ₹1,00,000 | 7.50% | ₹45,329 | ₹1,45,329 |
| HDFC Bank | ₹1,00,000 | 7.50% | ₹45,329 | ₹1,45,329 |
| Shriram Finance | ₹1,00,000 | 8.68% | ₹54,101 | ₹1,54,101 |
Apart from giving assured and attractive returns, FDs also have a few other key benefits that make them an ideal savings instrument for senior citizens. Here are some of them:
- Low-risk Savings
An FD comes with the guaranteed safety of both capital and returns as they are not affected by market conditions. Your FD interest rates are predetermined and assured. This means that you can save into your FD and rest assured knowing that your money is safe and sound.
Moreover, the recent announcement in the Union Budget regarding the DICGC (Deposit Insurance and Credit Guarantee Corporation) serves as an increased layer of protection. Previously, RBI offered insurance on a maximum of up to ₹1 Lakh. However, the insurance limit has now been increased to ₹5 Lakhs.
- Easy Liquidity
As we grow older, our need for increased liquidity in our savings and investments rises. An FD is very easy to liquidate. Firstly, your savings tenure is predetermined, this means that you will get your assured maturity amount at the end of the savings period.
However, if you need to withdraw your money before maturity, you can do that as well. The only thing is that you’ll need to pay a small penalty amount that’s usually 0.25% to 1% of your deposit.
FDs are a great way to ensure that you get attractive returns without having to sacrifice on liquidity.
- Better Interest Rate than Savings Account
Many of us leave a good amount of money lying idly in our bank accounts. This amount will usually accrue a very minimal rate of return. Saving into an FD is a much more lucrative alternative to a savings account as the rate of return for FDs are usually upwards of 6%, as opposed to the returns on savings accounts.
FDs have been around for decades and they’ve been a staple in many Indian households. This is for good reason- they’re safe, liquid and offer assured returns. They’re particularly popular among senior citizens as they can’t afford to make risky financial decisions and need a reliable savings option.