Banks Fetching Higher Interest Rates On 3 Year FDs For Senior Citizens

Many senior citizens tend to remain away from stock and debt market fluctuations. To receive a regular monthly income after retirement, they choose investing in bank fixed deposits (FDs). In the last year or so, though, declining bank deposit rates have dramatically reduced their monthly income. That’s because, despite steady repo rate drops from the Reserve Bank of India (RBI), banks have lowered interest rates on fixed deposits through all the tenures. In recent years, interest rates on small-saving schemes have also been cut. There are still some banks which offer best rates on three-year FDs for senior citizens, amid falling interest rates. Not significantly, considering the competition they face in attracting deposits, the smaller private banks appear to top the rate table on fixed deposits. On three-year FDs for senior citizens, smaller private banks bid interest rates of up to 7.45 per cent.

Compared to those charged by public sector banks, these interest rates are much higher. For example, on their three-year FDs, DCB Bank, RBL Bank, IndusInd Bank and others, as seen in the table, bid 6.5-7.45 per cent interest and 6 per cent and 5.85 per cent are offered by Punjab National Bank and Canara Bank respectively. Beasts such as the State Bank of India (SBI) and Bank of Baroda (BOB) are promising 5.8% and 5.6% interest on their three-year FDs for senior citizens. On three-year FDs, prominent private banks such as Axis Bank bid 5.90 per cent interest. ICICI Bank and HDFC Bank bid interest rates of 5.85% and 5.65%, respectively for senior citizens. The Deposit Insurance and Credit Guarantee Corporation (DICGC), an affiliate of the RBI, guarantees investments in fixed deposits of up to Rs 5 lakh. The minimum amount for investment ranges through banks. The amount varies from Rs 100 to Rs 10,000 at private and public banks respectively.

Private Sector Banks

• DCB Bank: 7,45%
• RBL Bank: 7.45%
• IndusInd Bank: 7.25%
• Yes Bank: 7.00%
• Bandhan Bank: 6.50%

Public Sector Banks

• Punjab National Bank: 6.00%
• Canara Bank: 5.85%
• Bank of India: 5.80%
• Punjab and Sind Bank: 5.80%
• State Bank of India: 5.80%

Conclusion

For senior citizens aged 60-80 (deposit amount below Rs 1 crore), interest rates are granted. For data analysis, all listed (BSE) public sector banks and private banks are included. There is little consideration for banks for which provable data is not available. Quarterly compounding is considered for all FDs.     

 

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