Senior citizens and fixed deposits: Benefits and considerations

Posted on Wednesday, January 31st, 2024 | By IndusInd Bank

For senior citizens who have spent a lifetime working hard, saving, budgeting, and investing, it’s now time for relaxation. However, relaxing doesn’t mean leaving your hard-earned money untouched or sitting idle. It’s about finding the right balance between earning returns and ensuring the security of your funds. After all, as you approach a peaceful retirement, the last thing you want is to worry about your savings’ safety. Here, fixed deposits, exclusively for senior citizens, play an important role, offering both safety and better returns.

Fixed deposits for senior citizens | The exclusive benefits

Fixed deposits make sure your golden years are not just about memories but also about financial comfort and security. Here’s how.

High interest rates

Usually, senior citizen FD rates are higher than other types of fixed deposit schemes. What’s more, the interest rate remains fixed throughout the deposit tenure. This means you know exactly how much you will earn from the start without concerns about market fluctuations or economic changes. You can even use an FD interest rate calculator offered by IndusInd Bank to estimate your returns upon maturity.

Save additional taxes

Senior citizen FD interest rate is already an appealing aspect, but there’s more. As a senior, you can enjoy significant tax benefits on FD investments. Under Section 80TTB of the Income Tax Act, 1961, seniors can claim a deduction of up to ₹50,000 from their gross total income. This deduction applies to the interest earned on tax saver fixed deposit accounts as well.

Premature closure is allowed

Life is unpredictable, and sometimes, financial needs can arise even when you are least expecting them. Senior citizens can particularly face urgent cash needs due to common health-related issues or important family matters. Thus, it is important to have a way to deal with such situations.

IndusInd Bank offers a premature withdrawal facility on fixed deposits for senior citizens with multiple payout options. You can opt to receive the interest on a monthly, quarterly, half-yearly, yearly, and maturity basis. Just withdraw a part of your investment as needed, and the rest will continue to grow.

Loan against FDs

This feature is valuable in your golden years when you might be hesitant to sell assets or might not want to ask for financial help. If an emergency need arises, be it for a home renovation, a family event, or a medical emergency, you can take a loan against your FD. This means you get immediate funds without liquidating your FD. Your investment continues to earn interest, and you get the liquidity you need.

Senior citizens and fixed deposits: Key considerations for a balanced approach

When considering fixed deposits as a senior citizen, it’s important to keep the following points to keep in mind:

• While FDs offer stability, remember that inflation might impact your future purchasing power.
• Be aware of interest rate trends. If rates rise, existing FDs could yield less.
• Interest income from FDs is taxable, slightly affecting net returns.
• Unlike stocks, mutual funds, or real estate, FDs focus on steady income, not capital growth.
• Reinvestment timing is crucial, as interest rates may vary at maturity.
• Research for higher fixed deposit interest rates to maximise returns.
• Before locking in long-term FDs, consider health and emergency fund needs.

Secure your golden years with IndusInd Bank Fixed Deposits

Fixed deposits for senior citizens bring peace of mind with their guaranteed returns and stability. They prove that age is not a barrier to smart investing. You can use these investments to grow your savings and ensure your golden years are as comfortable and stress free as possible.

To get extra value-added features, particularly for senior citizens, consider IndusInd Bank Fixed Deposits. As a senior, you can enjoy perks like:

• Option to apply for a fixed deposit account online within minutes.
• Preferential treatment at branches
• Priority customer service
• Flexible interest payouts
• Nomination facility
• Auto-renewal options
• One of the highest FD rates for senior citizens
• Special offers on other banking products, etc.

Book a fixed deposit today and watch your money work just as hard as you have.

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.