Bank fixed deposits (FDs) are one of the favourite investment instruments for most senior citizen investors. Ease of investment, liquidity and a high level of safety are some of the features that make it highly popular. After a series of rate hikes, the stance of the Reserve Bank of India (RBI) in the April 2023 Monetary Policy Committee (MPC) meeting was to keep the interest rate unchanged. However, rate transmission has not yet happened completely, as the interest rate on FDs by some of the banks has recently been revised upward.

Interest rates on senior citizen FDs have significantly gone up, ranging around 9 per cent to 9.6 per cent per annum by some of the small saving banks. Let’s find out, what is the best FD interest rate for senior citizens.

Which Bank Is Best for FD for Senior Citizens?

Things That Senior Citizens Should Keep In Mind When Investing In FDs

“The broad advice right now is to lock into these rates since they’re not likely to climb too much hereon. If you’re going for an FD, pretty much every bank now offers 7.50% on select tenors to senior citizens. Some banks are offering these rates for 5-10 years as well. SCSS is offering 8.2% right now. It makes sense to lock into those tenors in a high-rate scenario such as this, as the FD can also be a long-term income generator”, says Adhil Shetty, CEO, BankBazaar.com

Most Small Financial Banks (SFBs) today offer deposit rates above 8 per cent, with senior citizens being offered 9 per cent. But higher returns often come with higher risks which depositors must understand. Senior citizen depositors should carefully evaluate the credibility and financial strength of SFBs before investing their money.

The author is an Independent Financial Journalist