If you are 60 years of age or older and looking for a safe investment, fixed deposits (FD) still remain a strong option. The special thing is that some banks are giving up to 8% interest on 3 year FD to senior citizens. However, these rates are applicable on maximum investment up to Rs 3 crore.
Who is paying the highest interest?
Utkarsh Small Finance Bank and Jana Small Finance Bank are offering up to 8% interest on 3 year FD to senior citizens. These are among the options giving highest returns at present.
Other options up to 7.5%7.7%
If you want slightly lower but stable returns, Ujjivan Small Finance Bank is offering 7.7% interest. Apart from this, AU Small Finance Bank (7.6%), Equitas Small Finance Bank (7.5%) and Slice Small Finance Bank (7.5%) are also good options.
When is TDS deducted?
If the annual interest from FD of a senior citizen exceeds Rs 1 lakh, then banks deduct TDS. Although this is not an additional tax. You can adjust it while filing Income Tax Return (ITR) or get it back as a refund.
Easy way to save tax
If your total income does not come under the ambit of tax, then you can avoid deducting TDS by submitting Form 15H. Under the new tax system, there is no tax to be paid on income up to Rs 12 lakh, so senior citizens falling within this limit can avail this facility.
Be careful before investing
Even if your income is tax free, as per bank rules, TDS is deducted if the interest is more than Rs 1 lakh. In such a situation, it is important to submit Form 15H on time, so that unnecessary deductions can be avoided. FD still remains a safe and attractive investment for senior citizens, especially when interest rates are reaching 8%.