People who are retiring benefit greatly from Fixed deposits for senior citizens since they provide guaranteed high-interest rates. The fixed deposit for senior citizens will pay you interest on a regular basis, providing you with a steady source of income. Individuals can be saved from taxes by making an investment in the deposit which are tax saving, which is an additional advantage of a fixed deposit. Individuals don’t have to be concerned about their investment amount being affected by the market. because the interest rates of Fixed Deposits (FD) are already fixed. For senior individuals who intend to enjoy their retirement through the income, they will get from their investment, saving for their future is very important.
Mutual funds Vs. Fixed Deposit for Senior Citizens: Which is Beneficial?
Mutual funds and fixed deposits are among the best investments available to investors. Fixed deposits and mutual funds are both excellent methods to invest, but there are important considerations to make while doing so. In contrast to mutual funds, where mutual funds give a high return, their risk varies from fund to fund and is mostly influenced by the market, fixed-income investments (FDs) have no risk because the depositor will get fixed returns and good interest at a set rate.
Mutual funds have certain fees and expenditures that are deducted as part of operating the fund. FDs are cost-free for the term of the deposit’s tenure or at its beginning.
Seniors typically opt for investing opportunities after retirement that offer fixed returns and their risk tolerance becomes less as they are not earning anymore, they have no other source of income.
As fixed deposit offers more security it is a much better and more popular option among senior citizens.
Fixed deposit and its interest rates for senior citizens in the post office
Senior citizens get the same interest rate as every other individual in the post office
|Deposit type||interest rate(%)||compounded|
|1||1-year time deposit||5.5||Quarterly|
|2||2-year time deposit||5.7||Quarterly|
|3||3-year time deposit||5.8||Quarterly|
|4||5-year time deposit||6.7||Quarterly|
The post office provides a good amount of interest depending upon the time period you are investing
Fixed Deposit interest rate of other banks
The SBI interest rate on fixed deposits to senior citizens.
|7 days to 45 days||3.5|
|46 days to 179 days||4.5|
|180 days to 210 days||5.15|
|211 days to less than 1 year||5.2|
|1 year to less than 2 year||6.1|
|2 years to less than 3 years||6.15|
|3 years to less than 5 years||6.3|
|5 years and up to 10 years||6.65|
- So, in this case the post office gives higher returns if you are investing for 1 year and 5 years but if you are investing for more than year and less than 5 years then SBI provides better returns
HDFC interest rate on fixed deposits to senior citizens.
|7 – 14 days||3.50%|
|15 – 29 days||3.50%|
|30 – 45 days||4.00%|
|46 – 60 days||4.00%|
|61 – 89 days||4.50%|
|90 days – 6 months||4.75%|
|6 months 1 days – 9 months||5.50%|
|9 months 1 day < 1 Year||5.50%|
|1 year 1 day – 2 years||6.20%|
|2 years 1 day – 3 years||6.30%|
|3-year 1 day- 5 years||6.60%|
|5 years 1 day – 10 years||6.75%|
- In this case HDFC interest rates are higher than the post office. So, investing in HDFC bank is a better option than post office
YES Bank interest rate on fixed deposit to senior citizen.
|7 days to 14 days||3.75%|
|15 days to 45 days||4.20%|
|46 days to 90 days||4.60%|
|3 months to < 6 months||5.25%|
|6 months to < 9 months||6.00%|
|9 months to < 1 year||6.25%|
|1 Year to < 18 months||6.75%|
|18 months to < 20 months||7.25%|
|22 months 1 day to < 36 months||7.25%|
|36 months to <= 120 months||7.50%|
In this case Yes Bank interest rates are higher than at the post office. So, investing in HDFC bank is a better option than post office.
However, Post office Fixed deposit schemes are much better as any Post office scheme is backed by Government of India. While, banks fixed deposits above 5 lakh is not insured. If bank goes bankrupt, you will end up your money.
Looking at the risk, even if the returns are less, it is a wise advice for the senior citizens to open a fixed deposit account with post office.
Post Office Fixed Deposit Interest for Senior Citizen
The Post Office provides lower interest rates than some banks. If we check the post office fixed deposit interest, we can see the charges are 5.5 to 6.7%.
Maximum interest rate is provided if you do a FD for atleast 5 years. Minimum rate of interest is 5.5% which is provided for 1 year schemes.
Total Interest Payable
Ruchi Arora is a writer at trickyfinance covering various topics related to finance and cryptocurrency. This includes the latest news, events, reviews and various other information. Besides writing, she has a huge interest in designing and sketching.