Fixed deposits are one of the traditional investment schemes in India, offering guaranteed returns. They are risk-free investments and are generally popular among senior citizens who cannot afford to be exposed to sentimental-driven market-related instruments. Currently, many banks have hiked their FD rates in line with RBI’s repo rate hike. Generally, in a rate hike scenario, bank deposits scheme especially FDs become attractive. This month, many banks have introduced new FD schemes for elderlies. A senior citizen can even earn up to 8.15% rate on their deposits.
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In the last three policies, RBI has hiked the repo rate by 140 basis points. The latest hike was in the August 2022 policy with another 50 basis points. Currently, the repo rate is around 5.40%.
This has given enough room for banks to enter into a tug of war for giving attractive fixed deposits. Senior citizens currently are the biggest beneficiaries of the latest repo rate hike as they receive additional benefit rates on normal FDs.
Here are some of the banks that have revised their FDs and introduced new FD schemes for senior citizens lately.
Unity Small Finance Bank:
The small finance bank (SMF) offers an 8.15% rate each to senior citizens for more than 2 years to 3 years, and over 3 years to 5 years tenure. The rate is 7.50% on more than 5 years to 10 years tenure. The SMF offers a 7.85% rate each on 1-year tenure and over 1 year to 18 months tenure. The interest rate is 7.90% on over 18 months to 2 years tenure.
Under its callable bulk deposits, senior citizens receive additional 50 basis points on FDs below ₹2 crore to ₹100 crore and above.
Under ₹2 crore FDs, to the general category, the SMF offers a 6.75% rate from 1 year to 2 years tenure, while the rate is 7% from above 2 years to 5 years tenure, and 6.50% on over 5 years to 10 years tenure. For senior citizens, there are additional 50 basis points levied on these rates.
However, at Unity SMF, non-callable deposits are not offered to a senior citizen due to the urgency of the requirement.
IDBI Bank:
With effect from August 22, IDBI Bank is offering a 6.10% rate to senior citizens on FDs below ₹2 crore. The rate is 6.35% for above 1 Year to less than 18 months tenure, and 6.40% on 18 months to less than 30 months tenure respectively. The rate is 6.45% on 30 months to less than 3 years tenure. While the bank gives a 6.50% rate on 3 years to less than 5 years tenure.
IDBI Bank offers a 6.55% rate on tenures from 5 years to 10 years.
The bank has introduced Amrit Mahotsav FD Scheme for 500 days from August 22. Under the scheme, it offers a 6.70% rate on non-callable deposits up to ₹15 lakh. The interest rate is 6.60% on callable deposits for senior citizens.
For Amrit Mahotsav FD, IDBI Bank said, “The normal mark-up of 0.50% ONLY will be available for senior citizens and normal mark-up of 1% will be available for Retired Senior Citizens Staff.”
ICICI Bank FD rates:
On its website, the bank said, “ICICI Bank offers interest rates as high as 6.5% p.a. for Senior Citizens (above the age of 60 years) and up to 5.75% p.a. for citizens below the age of years.”
With effect from August 22, on FDs below ₹2 crore, the bank offers a 5.15% rate on tenures starting 185 days to less than 1 year, while the rate is 6% on tenures ranging from 1 year to 2 years for senior citizens.
ICICI Bank offers 6.10% to senior citizens on 2 years 1 day to 3 years tenure, while the rate is 6.60% for 3 years to 10 years tenure.
A senior citizen can also earn 6.60% on 5 Years (80C FD) – Max to ₹1.50 lakh tax saving scheme.
Under its Golden Years FD Interest Rates, with effect from August 19, the bank said, “the resident senior citizen customers will get an additional interest rate on an FD of 0.20% for a limited time over and above the existing additional rate of 0.50% per annum (include keyword ‘interest rate on FD).”
In the Golden Years FD scheme, the additional rate will be available on fresh deposits opened as well as deposits renewed during the scheme period. While the tenure is 5 years 1 day to 10 years. The scheme is valid up to October 7, 2022.