Senior Citizen FD Rates: The interest rate available to senior citizens on fixed deposits has gone up to more than 9.5 per cent. There are two small finance banks that are offering 9.5% or more interest rates to senior citizens and 9% or more interest rates to others.
These banks increased the interest rate
On Friday, Suryoday Small Finance Bank (SSFB) increased the FD rate on senior citizen deposits of less than Rs 2 crore to 9.6 per cent for 5 years. The bank is offering 9.1 per cent interest for regular customers. Unity Small Finance Bank (USFB) is also offering FD rates of up to 9.5 per cent to senior citizens and up to 9 per cent for others on deposits below Rs 2 crore. Apart from this, SBI is giving interest up to 7.6 percent while HDFC Bank is giving interest up to 7.75 percent to senior citizens. Axis Bank is paying interest up to 7.95 per cent while IDFC First Bank is paying interest up to 8.25 per cent.
Amount up to 5 lakhs only secured
Bank FD rates are rising and are likely to increase further. If RBI hikes the repo rate again in future, it is a good opportunity for senior citizens and regular customers to book FDs at higher rates. FDs not only offer guaranteed returns but are also considered safer as compared to various market linked products.
However, before investing you must know that only up to Rs 5 lakh is guaranteed under the Deposit Insurance and Credit Guarantee Corporation (DICGC) regulations of the RBI. This means that in case of bank failure, your deposits up to Rs 5 lakh in the bank will be safe.
How much should you invest?
The limit of Rs 5 lakh includes interest as well as principal amount. Banks are also required to give money back to depositors within 90 days in case of bank failure. Currently, to take advantage of higher FD rates and get guaranteed returns, senior citizens and others should invest only that amount in a bank on which the interest earns does not exceed Rs 5 lakh. To deposit a higher amount, the customer can open multiple FD accounts in different banks to be on the safe side.
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