Why Senior Citizens Should Consider Investing in Fixed Deposits?

byDilip PrasadLast Updated: February 2, 2023
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 get retired or are already retired it is imperative to have a secured investment plan. Fixed deposits ensure a secured investment as it not only provides 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 of 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 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.

How to Open a Fixed Deposit with Paytm?

Here is the step by step process to open a fixed deposit account on Paytm Payments Bank:

Step 1: Open your Paytm mobile application 

Step 2: Go to ‘Paytm Payments Bank’ and click on it 

Step 3: Enter your passcode to ‘Paytm Payments Bank’

Step 4: You will see various options on ‘Services’. Click on ‘Create FD’

Step 5: Enter the amount you wish to deposit and click on ‘Proceed’

Paytm Payments Bank also offers an additional feature to ‘Auto-create Fixed Deposit’ that allows the users to set a minimum balance limit in their savings account and create an FD as and when the savings account balance exceeds the limit set by them. 

Benefits offered by Paytm Payments Bank FD for Senior Citizens

  • One can make payments and send money directly from FD
  • No penalty is charged on premature withdrawal of money from the FD account. An individual can break the entire amount if they require
  • One can create FD anytime with a minimum investment of Rs.100 only
  • The interest rate applicable on Paytm Payments Bank FD  for senior citizens is  6.75%.
  • Auto-renewal option is available on maturity

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 and have taken early retirement. This rule may vary from bank to bank and are subject to certain terms and conditions

Documents Required to Open Senior Citizen FD Account

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

  • Age Proof Document
  • Aadhaar Card
  • PAN card
  • Photograph
  • Address Proof such as Passport, Aadhaar, etc.

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. Thus, making 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.


Can a senior citizen open an FD joint account with a person who is not a senior citizen?

Yes, a senior citizen can open a joint FD account with a person who is not a senior citizen. However, if it is a special FD scheme for senior citizens, then the primary account holder must be a senior citizen.

Do senior citizens have to pay TDS for FDs?

A senior citizen will have to pay a Tax Deposit at Source (TDS) only when the combined interest of all the FDs he/she holds in a specific customer ID with the bank exceeds Rs. 50,000 in a financial year.

Is age proof required if a senior citizen wants to open a second or third FD account with the same bank?

Ans- Yes, each time a senior citizen opens an FD account, he/s will need to submit the age proof to the bank.

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