New Delhi: Fixed deposits are popular with senior citizens, who use them as vehicles for creating emergency corpus and even as savings avenues.
Fixed deposits offer liquidity and ensure regular interest income. The interest earned on fixed deposits is taxable, but several senior citizens fall in the lower tax brackets, which ensures that their tax liability is minimal or nil, if other income is negligible.
At present, private and public sector banks offer interest rates of up to 7.75 percent to senior citizens on three-year FDs. Here are the top ten banks (by term deposit holdings) that offer lucrative interest rates on FDs with tenures of three years.
The key parameters for shortlisting these banks include their term deposit holdings, the best interest rate offered to resident Indians over the age of 60 years and 3-year fixed deposits under Rs 1 crore. The value is calculated based on quarterly compounding of interest. The data is as of February 19, 2024.
Bank of Baroda
Interest rate on three-year FDs for senior citizens: 7.75%
Rs 1 lakh invested for three years will grow to Rs 1.26 lakh
Axis Bank
Interest rate on three-year FDs for senior citizens: 7.60%
Rs 1 lakh invested for three years will grow to Rs 1.25 lakh
HDFC Bank, ICICI Bank and Punjab National Bank
Interest rate on three-year FDs for senior citizens: 7.50%
Rs 1 lakh invested for three years will grow to Rs 1.25 lakh
Canara Bank
Interest rate on three-year FDs for senior citizens: 7.30%
Rs 1 lakh invested for three years will grow to Rs 1.24 lakh
State Bank of India and Bank of India
Interest rate on three-year FDs for senior citizens: 7.25%
Rs 1 lakh invested for three years will grow to Rs 1.24 lakh
Union Bank of India
Interest rate on three-year FDs for senior citizens: 7%
Rs 1 lakh invested for three years will grow to Rs 1.23 lakh
Indian Bank
Interest rate on three-year FDs for senior citizens: 6.75%
Rs 1 lakh invested for three years will grow to Rs 1.22 lakh
The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI, guarantees investments in fixed deposits of up to Rs 5 lakh.
