senior citizen
Amid rising inflation and market fluctuations, fixed deposit i.e. FD still remains the most reliable investment option for senior citizens. The special thing is that some small finance banks are offering interest up to 8.05% to elderly investors on 5 year FD. These rates are applicable for people aged 60 years and above.
This bank is giving highest interest
Suryoday Small Finance Bank is currently offering the highest interest of 8.05% to senior citizens on 5 year FD. Whereas Jana Small Finance Bank is offering interest up to 7.77% and Ujjivan Small Finance Bank is offering interest up to 7.70%.
Apart from this, Equitas Small Finance Bank and Utkarsh Small Finance Bank are giving returns up to 7.50%. Compared to big banks, small finance banks are offering higher interest to attract customers.
Why are small banks giving higher returns?
According to Saurabh Jain, co-founder of Stable Money, small finance banks are offering attractive interest rates to increase retail deposits. He said that banks like Utkarsh, Suryoday and Shivalik have been maintaining stability in their FD rates for a long time, which has increased the confidence of investors.
Caution is necessary before investing
Experts say that it is not right to invest just by seeing high interest. It is also important to take care of security while investing in small finance banks. However, insurance cover of up to Rs 5 lakh is available on FDs of all banks from Deposit Insurance and Credit Guarantee Corporation i.e. DICGC.
Therefore, it is advised that FD investment in small finance banks should be kept within the limit of Rs 5 lakh, so that the money remains safe in case of any untoward incident.
Also know the rules of TDS on FD
If the annual interest received from FD in any bank exceeds Rs 1 lakh, then the bank deducts TDS. However, in the new tax regime of FY 2025-26, tax will not have to be paid on income up to Rs 12 lakh. In such a situation, senior citizens can avoid deducting TDS by submitting Form 15H.
