What is a Senior Citizen FD?
This is a standard term deposit offered to residents of India who are over the age of 60. To encourage savings and help protect retirees against inflation, banks typically offer an additional 0.5% over regular FD rates.
Why Choose a Senior Citizen FD?
- Higher Returns: Gives better yields which are crucial for generating post-retirement steady income.
- Regular Payouts: Options for monthly, quarterly, or half-yearly payouts to cover living expenses.
- Special Schemes: Periodic banks launch temporary schemes (e.g. SBI Wecare) giving even more interest (+0.80%).
Tax Implications
Senior citizens enjoy higher tax benefits compared to regular individuals.
- Section 80TTB: Interest income up to ₹50,000 in a financial year is completely exempt from income tax.
- No TDS via Form 15H: If total income is below taxable limits, submitting Form 15H ensures the bank deducts no TDS.