Why Senior Citizens Should Consider Investing in Fixed Deposits?

byDilip PrasadLast Updated: April 24, 2024
Why Senior Citizens Should Consider Investing in Fixed Deposits?

Fixed deposit is a savings instrument offered by Banks and NBFCs. As one of the safest options of investment available in the market, the FD offers a guaranteed return to the individual at a specific tenure. For individuals who are about to retire or are already retired, it is imperative to have a secured investment plan. Fixed deposits ensure a secured investment as they not only provide an opportunity to accumulate funds in the long term but also provide fixed returns irrespective of market fluctuations.

Let’s read further to know in detail why fixed deposits for senior citizens are a lucrative option for investment.

Benefits of Investing in FDs for Senior Citizens

Here are some of the benefits of investing in fixed deposits for senior citizens:

  • FDs offers higher fixed interest rates for senior citizens, thus resulting in more earning
  • The interest earned on these deposits can be changed into monthly income, ensuring that you have a steady flow of income after retirement
  • Senior citizens can also opt for tax saving fixed deposit scheme that will help them to save on taxes under Section 80C of the IT Act
  •  Senior citizens can choose various interest payout options where the interest is credited to the savings account of the depositor frequently- either yearly, half-yearly, quarterly or monthly
  • It provides an opportunity to increase your savings at a steady pace with zero risk involved
  •  FD schemes guarantee returns after the completion of a specific tenure
  • The interest rates applicable on fixed deposits do not depend on the market fluctuations and remain fixed at the rate an individual has booked the FD. This ensures guaranteed returns on maturity.
  • Based on the investment objective, an individual can opt for short-term or long-term fixed deposits. The tenure can range from a minimum of 7 days to a maximum of 10 years.

Eligibility Criteria for Senior Citizens to Open FD Account

Any senior citizen who is a resident of India can open a fixed deposit account. The NRI senior citizens can also open an FD account through NRE or NRO accounts. The criteria to open an FD account for a senior citizen is-

  • The depositor should be 60 years or above on the date on which he/s opens the respective term deposit account
  • Some banks also allow individuals to open FD accounts if they are more than 55 years old and have taken early retirement. This rule may vary from bank to bank and is subject to certain terms and conditions

Documents Required to Open Senior Citizen FD Account

The following is the list of documents that should be kept handy while opening a fixed deposit account-

The Bottom Point!

To ensure that one has a financially secured life after retirement, every retired investor must consider including fixed deposits in their investment portfolio. Other investment options may offer better returns as compared to FDs, however, the risk involved in them is also high. On the other hand after retirement, the risk-taking ability of an individual decreases simultaneously. This makes FD a lucrative option of investment for them as it is known to provide a secured and guaranteed return to the investors with zero risk involved.


Is it possible for a senior citizen to open a joint FD account with a non-senior citizen?

Yes, a senior citizen can open a joint FD account with a non-senior citizen. However, if it is a special FD scheme for senior citizens, the primary account holder must be a senior citizen.

Do senior citizens need to pay TDS for FDs?

Senior citizens are required to pay Tax Deposit at Source (TDS) only when the total interest earned from all FDs held under a specific customer ID exceeds Rs. 50,000 in a financial year.

Is age proof necessary for a senior citizen to open multiple FD accounts with the same bank?

Yes, senior citizens are required to provide age proof each time they open an FD account with the bank.

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