Senior citizens who have retired or are on the verge of one always look for investment opportunities to secure their financial future. In this regard, numerous investment options in the market offer a high return, but not all of them are as safe as an FD. Equities are another option, but the guaranteed return cannot match the FDs offer.
Moreover, senior citizen FDs get an additional interest rate over standard FDs. And, if you opt for a tax saver FD for senior citizens, you will get a significant return while earning income tax deductions.
Benefits of investing in tax free Fixed Deposit for senior citizens
- FDs provide senior citizens with greater fixed interest rates, which increases earnings.
- They can convert the interest from these contributions into monthly income to guarantee a consistent earnings stream after retirement.
- Senior citizens can choose a tax saving Fixed Deposit plan that will enable them to reduce their tax obligations in accordance with Section 80C of the IT Act.
- The best Fixed Deposit plans for senior citizens have various options for interest payment, including where interest is deposited to the depositor’s savings account (either annually, half-yearly, quarterly, or monthly). So they can plan their finances accordingly.
- It gives them a chance to expand their investments steadily without risks.
- The interest rates that apply to Fixed Deposits are not affected by changes in the market and remain fixed at the same rate at which the FD was initially booked. This guarantees fixed returns upon maturity.
- Individuals can choose between short-term and long-term Fixed Deposits depending on their financial goals. The term can be for as little as seven days or ten years. However, tax saver FD for senior citizens have a fixed tenure of five years.
- The nomination facility with FDs helps the legal successors of a senior citizen to claim the money. A form under the name Form DA1 must be provided when submitting a nomination.
Eligibility criteria for the Fixed Deposit for senior citizens
Any Indian senior citizen can open an account for a Fixed Deposit. Senior NRIs may also open FD accounts using their NRO or NRE accounts. Seniors must meet the following requirements to open an FD account:
- The depositor must be at least 60 years old when opening the specific term deposit account.
- If a person has taken early retirement and is over 55, certain banks also permit them to open FD accounts. This regulation can differ from bank to bank and is constrained by particular terms and circumstances.
Documents required for opening an FD for senior citizen
To open a Fixed Deposit account, senior citizens will have to produce the following documents:
- Age proof
- Aadhaar card
- PAN card
- Passport size photo
- Address proof (Passport, Aadhaar card, etc.)
How to apply for a Fixed Deposit for a senior citizen?
Here is a step-by-step guide on the online application process for FDs for senior citizens–
Step 1: Visit the official website or mobile app of your preferred lender.
Step 2: Go to the Fixed Deposit option, which can be under personal banking, or similar other headers.
Step 3: Fill up the form and submit the required documents.
Step 4: Transfer the funds.
Step 5: Receive confirmation of your investment through email or SMS.
Now, if you plan to apply offline, you can visit the nearest branch of your preferred financial institution and complete the due process to begin your investment journey.
To sum it up, tax saver FD for senior citizens offers a stable return and is considerably safer compared to equity investments. Every retired investor should consider integrating Fixed Deposits into their investment portfolio to ensure that they have a financially stable life after retirement.
Other investment choices may provide higher returns than FDs, but they also carry a higher level of risk. As FDs are known to offer investors a secured and guaranteed return with no risk associated, many find them to be a beneficial investment option. Willing investors should keep these pointers in mind and make an informed decision accordingly.