FD for senior citizens—is it worth it?

Retirement is often considered a ‘golden period’ and this period should not mean being concerned about money matters for which you have almost given your life!

People approaching their golden phases of life should have a sure-shot financial plan ready that provides with enough income flow for you and your family.

If you are a senior citizen or even a standard citizen who is vying for a reliable and sure-shot retirement investment, fixed deposits are the finest financial product to opt. Why? The prime reason is that the returns of a fixed deposit are fixed, and not impacted by ROI as compared to mutual funds.

Being a senior citizen pays you back as leading online companies offer you bonus 0.25% FD interest rates. If you are Indian resident who is above 60 years, you would expect to get one of the highest FD interest rates on senior citizen in the market today.

Hence, after having said that, is the FD for senior citizens are worth it? Let’s provide you some benefits of a senior citizen fixed deposit that will help you know more!

Senior citizen fixed deposit – Some immediate benefits at a glance!

Assured safety

The senior citizen fixed deposit is laced with a safety cover. Fixed deposits are insured up to Rs.1 lakh as under the Deposit Insurance & Credit Guarantee Scheme of India, regulated by the Reserve Bank of India. Compared to equities which are impacted by market fluctuations, fixed deposit plans have emerged a safe investment option for all.

Fixed returns

As compared to the ROI in the mutual funds or stock markets, the ROI in a fixed deposit is higher. Use a free fixed deposit calculator on a lender’s website and know how much you will earn. Fixed deposits have high stability, and it makes their ROI higher as well.

Higher FD interest rates

Leading non-banking finance companies will let you earn as high as 8.10% on the opening of an FD account with only Rs.25,000. Want to know what your savings will earn? Use a FD calculator available free on a lender’s website to exactly calculate your future savings super-quick.

Offers good degree of liquidity

Did you know that fixed deposits carry a greater degree of liquidity when you face any financial crunches? Yes, you are free to break them when you face a desperate need for money. Although a premature withdrawal of your FD would not provide a standard citizen any interest returns as promised, a senior citizen will give a bit lesser ROI as promised had you completed the tenor. What’s more, you will also have to cough up some penalty for doing that.

Tax benefits

As per the Section 80C of the Income Tax Act, you are entitled to save up to Rs.3 lakh in taxes if you are a senior citizen. To enjoy this facility, all that you need to do is, declare your interest income at the time of filing your IT returns every financial year. 

The Bottom Line

With so many features and benefits of the senior citizen FD, do you still need any validation if it’s really worth it? You can apply for an online senior citizen FD with a prominent online lender and get one step closer to a smarter retirement planning!

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