How FD can help senior citizens in their financial well-being?
August 28, 2020
For senior citizens, saving a large chunk in Fixed Deposits is the best option as the depositor gets the principal amount along with the interest earnings. Read further to know how FD can help senior citizens in their financial well-being.
Saving for the future should be a priority from the time you start working. But that should not stop when you become a senior citizen. When you are 60 years old and above, you will surely lookout for a safe investment option, like Fixed Deposits (FDs). FDs are the preferred type of investment avenues for senior citizens as it carries minimal risk. Although you must have saved enough corpus for your retirement, yet most of the retirees must invest strategically in FDs to earn a regular income. A fixed guarantee of income will help to meet unexpected expenses.
Features of Senior Citizen FDs
A senior citizen can choose a Fixed Deposit tenure that ranges from 7 days to 10 years
Such accounts can be closed prematurely at any point in time. However, premature withdrawal is not allowed in tax-saver FD and this attracts penalty.
Senior citizens can deposit amounts as high as Rs 1 crore or higher. The senior citizen FD rates are mostly higher than the regular FD accounts. The compounding of interest takes place every quarter. You receive interest payments at the time of maturity. Senior citizens can add a nominee to the account.
Benefits of Senior Citizen FDs
It is a safe and low-risk investment option as compared to mutual funds or stocks. The senior citizen FD interest rates are slightly high (usually ranging between 3.25% and 6% per annum) than what is offered to the general citizens, which can help you earn more money. It allows you to save tax on earnings under Section 80C of the Income Tax Act. Regular interest payout is the biggest boon of Senior Citizen FD Account as it can act as a regular income source.
Once you retire, you will need to continue investing in order to ensure regular income. In such a case, opening an FD Account is a wise decision as the principal amount and returns are guaranteed safe as opposed to investments in market-linked products.
If you open a Senior citizen FD Account with ICICI Bank, you get an exclusive interest rate of 0.30% per annum on term deposits above 5 years of tenure. FDs will help you to sail through your golden years without any financial worry. In terms of taxes, senior citizens are liable to pay taxes, which is deducted at source. Those who are not liable to pay taxes are required to submit Forms 15G or 15H to the bank.
If you’re planning to open an FD Account, you can do so online or offline. You need to provide documents such as ID proof, Address Proof, Aadhaar Card, a passport-sized photo and PAN card.
Terms and Conditions apply.
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