Fixed Deposit For Senior Citizen: Interest Rates, Term, Income Tax Benefit And Other Details
Major banks across the country offer an interest rate ranging from 4 to 7.75 per cent on fixed deposits of up to Rs 1 crore for a term lower than five years. India Post, which has a network of more than 1.5 lakh post offices across the country, pays an interest rate of 6.6-7.4 per cent on deposits for a term of 1-5 years. Most financial institutions pay slightly higher rates to senior citizens on bank deposits across several maturity periods (terms). According to financial planners, fixed deposits are suitable for investors looking for fixed returns with minimum risk.Â
Here's a comparison of interest rates paid by State Bank of India, HDFC Bank, ICICI Bank and India Post (post office) to senior citizen customers on fixed deposits up to Rs 1 crore:
State Bank of India (SBI)
| Term | Interest rate offered to senior citizen (with effect from July 30, 2018) |
|---|---|
| 7 days to 45 days | 6.25% |
| 46 days to 179 days | 6.75% |
| 180 days to 210 days | 6.85% |
| 211 days to less than 1 year | 6.90% |
| 1 year to less than 2 year | 7.20% |
| 2 years to less than 3 years | 7.25% |
| 3 years to less than 5 years | 7.30% |
| 5 years and up to 10 years | 7.35% |
| (Source: sbi.co.in) | Â |
HDFC Bank
| Term | Interest rate offered to senior citizen (with effect from August 6, 2018) |
|---|---|
| 7 - 14 days | 4.00% |
| 15 - 29 days | 4.75% |
| 30 - 45 days | 6.25% |
| 46 - 60 days | 6.75% |
| 61 - 90 days | 6.75% |
| 91 days - 6 months | 6.75% |
| 6 months 1 day- 6 months 3 days | 7.25% |
| 6 months 4 days | 7.25% |
| 6 months 5 days- 9 months | 7.25% |
| 9 months 1 day- 9 months 3 days | 7.50% |
| 9 months 4 days | 7.50% |
| 9 months 5 days - 9 months 15 days | 7.50% |
| 9 months 16 days | 7.50% |
| 9 months 17 days < 1 Year | 7.50% |
| 1 Year | 7.75% |
| 1 year 1 day - 1 year 3 days | 7.75% |
| 1 year 4 days | 7.75% |
| 1 year 5 days - 1 Year 15 Days | 7.75% |
| 1 Year 16 days | 7.75% |
| 1 year 17 days - 2 Years | 7.75% |
| 2 years 1day - 2 Years 15 days | 7.60% |
| 2 Years 16 days | 7.60% |
| 2 years 17 days - 3 Years | 7.60% |
| 3 years 1day - 5 years | 7.60% |
| 5 Years 1 Day - 8 Years | 6.50% |
| 8 Years 1 Day - 10 Years | 6.50% |
| (Source: hdfcbank.com) | Â |
ICICI Bank
| Term | Interest rate offered to senior citizen (with effect from August 14, 2018) |
|---|---|
| 7 days to 14 days | 4.50% |
| 15 days to 29 days | 4.75% |
| 30 days to 45 days | 6% |
| 46 days to 60 days | 6.25% |
| 61 days to 90 days | 6.50% |
| 91 days to 120 days | 6.50% |
| 121 days to 184 days | 6.50% |
| 185 days to 289 days | 7% |
| 290 days to less than 1 year | 7.25% |
| 1 year to 389 days | 7.25% |
| 390 days to 2 years | 7.50% |
| 2 years 1 day upto 5 years | 7.75% |
| 5 years 1 day upto 10 years | 7.50% |
| 5 Years Tax saver FD (max. up to Rs 1.50 lakh) | 7.75% |
| (Source: icicibank.com) | Â |
India Post
| Term | Interest rate offered to senior citizen |
|---|---|
| 1 year | 6.60% |
| 2 year | 6.70% |
| 3 year | 6.90% |
| 5 year | 7.40% |
| (Source: indiapost.gov.in) | Â |
Income tax benefit for senior citizens on interest earned
According to income tax laws, interest income up to Rs 50,000 in a year from a fixed deposit earned by the senior citizen on a saving deposits or fixed deposit is eligible for deduction of taxable income.
While Section 80TTB of the Income Tax Act states that such income is eligible for income tax deduction, Section 194A mandates that no tax will be deducted at source (TDS). That means senior citizens can enjoy income up to Rs 50,000 a year in the form of interest from a savings account or fixed deposit without having to bear any income tax. This is applicable on savings and fixed deposit accounts in a commercial bank, post office or co-operative bank, according to the taxman.
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