Senior citizens tend to prefer investing in schemes that offer guaranteed returns while minimising risk.While there are various investment options available to seniors, fixed deposits (FDs) are popular due to their high and stable interest rates.
Senior citizens usually enjoy higher interest rates on fixed deposits compared to the general population, with most banks offering rates as high as 0.50 percent higher. Moreover, under Section 80TTB of the Income Tax Act, interest earned on deposits made with banks, cooperative banks and post offices is eligible for tax exemption and can be deducted up to Rs 50,000. Moreover, there is no withholding tax deduction on interest payments up to Rs 50,000 in a financial year.
If you are over 60 years old, you can invest in these fixed term deposits and choose the term and amount based on your financial goals. Instead of investing all your money in one fixed term deposit, you can choose multiple fixed term deposit accounts with different amounts and terms. This strategy allows you to reinvest your funds at a higher interest rate when interest rates rise.
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FDs come in handy during financial emergencies. Some banks offer the flexibility to withdraw your FD early without incurring any penalty or additional charges. However, it is advisable to compare the interest rates offered by different banks and choose the tenure and interest rate carefully to ensure you get the best terms for your deposit.
Moreover, it is important to check the terms and conditions before making a decision. Opening an FD account is a simple process. You can either visit a nearby bank branch or apply online. To simplify the process, it is often recommended to open an FD account with a bank with which you have an existing relationship.
This method saves you time on paperwork and other formalities, and also gives you the freedom to choose the bank in which you want to invest your funds in a fixed deposit.
Below is a list of fixed deposits for seniors offering the highest interest rates in July 2024.