Senior citizens now have exposure to their best-fixed deposit booking opportunity thanks to the hike in the repo rate, which has climbed by a total of 250 basis points to 6.50 per cent so far. The majority of banks and NBFCs give a 50 bps premium over the standard interest rate on fixed deposits, however, these preferential interest rates are only made available to senior citizen residents who book a fixed deposit for a predetermined tenure. The annual consumer price inflation in India rose to 6.52% in January 2023, the highest level in three months, from 5.72% in December. On the plus side, senior citizens can now earn returns on their deposits that outperform inflation in addition to the DICGC cover on deposits up to ₹5 lakhs, which is the icing on the cake for them. In this discussion of fixed-deposit returns that outperform inflation, we have taken into account three public sector banks that guarantee senior citizens returns of above 8%.
Punjab & Sind Bank
This PSB lender announced an interest rate hike on fixed deposits of less than ₹2 Cr on 21/02/2023. The bank had introduced a range of special tenors with additional interest rate benefits. On the PSB-Utkarsh 222 Days scheme, senior citizens will get an interest rate of 8.50% whereas super senior citizens will get an interest rate of 8.85%.
On PSB Fabulous 300 Days deposit scheme, senior citizens will get 8.00% and super senior citizens will get 8.35% through the offline mode of deposit whereas senior citizens can get 8.25% and super senior citizens can get 8.60% through online mode.
Punjab National Bank
The PSU lender PNB hiked interest rates on domestic term deposits of less than ₹2 Cr on 20th February 2023. On a special tenure of 666 days, the bank is now promising a maximum interest rate of 7.75% for senior citizens, however super senior citizens can earn as high as 8.05%. Whereas on PNB Uttam (Non-Callable) fixed deposit scheme (For Deposit Above Rs. 15 Lakh), the bank is offering a maximum interest rate of 7.80% for senior citizens and 8.10% for senior citizens.
For domestic deposits of less than Rs. 2 crore from PNB, senior citizens 60 years of age and over (up to 80 years of age) would get an additional rate of interest of 50 basis points (bps) over the standard card rates for a term up to 5 years and 80 bps for a period above 5 years. Moreover, super senior citizens who are over 80 years old will get an additional rate of interest that is 80 basis points higher than the corresponding card rate for all maturity tenors.
Union Bank of India
This PSU bank had last hiked its fixed deposit rates on 25/11/2022. On two particular tenors of 800 days and 3 years, Union Bank of India is offering a maximum interest rate of 7.30%. Senior citizens can earn 7.80% on these tenors thanks to the additional rate component that applies to resident senior citizen deposits, which is 0.5% higher than the standard rate.
Super senior citizens, on the other hand, can earn 8.05% on the same tenors thanks to the additional rate component that applies to resident super senior citizens, which is 0.75% higher than the standard rate. “The additional rate on super senior term deposits would be applicable for the term deposits opened/renewed on or after 01.12.2022,” mentioned Union Bank of India on its website.