Maximising Your Golden Years: Guide to Choosing the Best FD for Senior Citizens

Senior Citizen Fixed Deposit schemes are specifically designed for individuals aged 60 and above. These schemes offer higher interest rates, usually an additional rate up to 0.50%* p.a. over and above regular FD rates, ensuring senior citizens enjoy stable and secure returns on their investments.

Let's delve into some important highlights of these schemes:

1. Higher Interest Rates

Senior Citizen FDs come with additional interest rates. The interest rate varies across issuers, however, it’s generally up to 0.50% p.a.

2. Tenure

The tenure for senior citizen fixed deposits usually ranges from 7 days to a maximum of 10 years. However, it's always better to choose a tenure that's aligned to your financial objectives and goals. For instance, if you have short-term needs, you can book an FD for 12 months

3. Premature Withdrawals

Like Regular FDs, Senior Citizen FDs typically provide premature withdrawal facilities. However, FD issuers often levy a penalty on premature withdrawals, so it's important to consider this factor before making any hasty decisions.

Note: Ujjivan SFB does not levy any penalty fee for premature withdrawals made after 6 months from the time of deposit.

4. Loan against FD

One of the advantages of a Senior Citizen FD is that it can be used as collateral to obtain a loan. The maximum loan amount sanctioned depends on the principal amount of your FD. You repay the loan in fixed instalments over a specified period. The FD remains locked as collateral until the loan is fully repaid.

5. Overdraft against FD

Similar to loan against FD, overdraft against FD allows you to access funds with ease. However, you’re allowed to withdraw funds only up to a certain limit, which depends on the deposit amount. The interest is charged only on the amount you withdraw. There’s no fixed repayment schedule and you can withdraw funds from the overdraft facility multiple times until the limit is reached.

6. Flexible Interest Pay-outs

Non-cumulative Fixed Deposits offer flexible interest pay out options - monthly, quarterly or at the time of maturity. Seniors can opt for such FDs to generate a regular source of income post retirement.

7. Automatic Renewals

FD issuers offer the facility of automatic renewals at the time of maturity if no instructions are mentioned at the time of opening the account. The tenure for renewal will be the same as the existing FD account.

To make an informed decision about choosing the best Senior Citizen Fixed Deposit, it's crucial to calculate your potential returns. You can use a Fixed Deposit ROI Calculator to easily calculate your interest and overall returns. This will help you plan your investments better.

When selecting an FD plan as a senior citizen, it's important to consider various factors to ensure you make an informed decision. Here are some key factors to keep in mind:

1. Interest Rates

Compare interest rates offered by different banks and financial institutions. Look for competitive rates that provide maximum returns on your investment. Small Finance Banks like Ujjivan SFB offer higher interest rates on deposits.

2. Priority Banking Services

Having a peace of mind after retirement often transcends materialistic needs. Book an FD with a bank that offers convenience. Banks like Ujjivan SFB offer personalised care with doorstep banking and specialised banking solutions at their branches so the seniors can relax and carry out transactions with ease.

3. Interest Pay-out Options:

Evaluate the interest pay-out options. For non-cumulative FDs, the interest pay-out happens monthly, quarterly or at maturity based on your preference. While cumulative FDs offer interest pay-outs at the time of maturity. Choose an option that suits your cash flow requirements and provides regular income.

4. Premature Withdrawal Penalty

Check the penalty charges for premature withdrawal to ensure you have flexibility in case of emergency fund requirements. Just so you know, Ujjivan SFB doesn't levy any penalty fee for premature withdrawals made after 6 months from the time of opening your account.

Maximising your golden years requires careful financial planning. Booking an FD can be a wise decision as the principal amount and returns are not affected by market volatility. However, evaluate service charges, interest rates, additional benefits, etc., before booking an FD for senior citizens

Looking to grow your savings? Ujjivan SFB offers a wide range of fixed deposit products. Select the FD of your choice and take a step forward to your financial goals. Alternatively, you can browse through Ujjivan SFB product suite - our wide range of financial products are designed to make your financial life better.