Many banks are offering attractive returns on FDs. Senior citizens earn higher interest rates than regular investors, which is why they prefer to invest in FDs. Currently, some banks are offering over 8% interest on 3-year FDs to senior citizens aged 60 and above. Senior citizens also benefit from income tax exemptions on FD investments. Under Section 80C of the Income Tax Act, 1961, senior citizens (Senior Citizen Saving Scheme) can claim an income tax exemption of up to Rs 1.5 lakh by investing in FDs.
Interest Rates Offered by Banks for Senior Citizens on 3-Year FDs
Many banks are offering attractive interest rates on three-year FDs to senior citizens, with rates exceeding 8%. These banks include both private and public sector institutions.
1. Axis Bank
Axis Bank, a private sector bank, offers an annual interest rate of 7.6% to senior citizens. For an FD of Rs 1 lakh, you will receive Rs 1,07,819 after one year. Over three years, your investment will grow to Rs 1,25,340.
2. Bandhan Bank
Bandhan Bank offers a 7.75% annual interest rate for senior citizens. If you invest Rs 1 lakh, you will receive Rs 1,07,978 after one year. After three years, your investment will total Rs 1,25,895.
3. RBL Bank
RBL Bank provides an 8% interest rate per annum for senior citizens. A one-year FD of Rs 1 lakh will yield Rs 1,08,243, while a three-year FD will grow to Rs 1,26,824.
4. DCB Bank
DCB Bank offers the highest interest rate of 8.05% per annum for senior citizens. An FD of Rs 1 lakh will grow to Rs 1,08,296 after one year and Rs 1,27,011 after three years. The minimum starting deposit is Rs 1,000.
Investment in Senior Citizen Savings Scheme (SCSS)
The minimum investment in SCSS (Senior Citizen Saving Scheme) is Rs 1,000, with multiples of Rs 1,000 allowed, up to a maximum of Rs 30 lakh. If any additional deposit is made, it will be refunded, and only the savings account interest rate will apply from the date of deposit until withdrawal. Investments in SCSS qualify for tax benefits under Section 80C of the Income Tax Act, 1961.
Account Extension
Account holders can extend their SCSS (Senior Citizen Saving Scheme) account for an additional three years from the maturity date. To do this, submit the required form and passbook to the concerned post office or bank within one year of the maturity date. The extended account will earn interest at the rate applicable on the maturity date.
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