World Senior Citizens Day: Bank, Post Office FDs and other interest rates for senior citizens compared

World Senior Citizens Day is observed on August 21 every year to highlight the contributions of elderly people to society. The day focuses on the issues faced by the people above the age of 60 years and what can be done to make their lives easier.

Senior citizens need help and special care due to their old age. They also need financial help to pay for medical treatments and other expenses. In this context, it’s crucial for senior citizens to have adequate savings for a hassle free post-retirement life. There are a number of investment schemes available for elderly people, including the fixed deposits, which offer attractive rates of return and tax benefits.

This World Senior Citizen Day,  let’s take a look at wide range of savings instruments that offer higher interest rates for senior citizens.

Interest Rates on savings schemes for senior citizens

Bank FDs: Fixed deposits in banks are a great way to save money and get consistent returns. Most of the banks offer 0.5 per cent extra interest for senior citizens. Fixed Deposit schemes by most of the banks offer between 3 and 7.25 per cent interest rates to investors, depending on the duration of investment. For elderly people, the interest rate varies between 3.5 and 7.75 per cent. Tax-saving FDs have tenure of 5 years and offer deductions under Section 80C of the Income Tax Act.

Post office FDs: Post office FDs offer interest rates between 6.9 and 7.5 per cent. Under the Post Office Time Deposit scheme the tenure ranges from 1 to 5 years. The investment option provides tax benefits as well under Section 80C.

Public Provident Fund (PPF): PPF investments give a return of 7.1 per cent interest rate per annum. Deposits can be opened with a minimum of Rs 500 in a financial year. PPF provides tax benefits u/s 80C. The interest earned on the deposit is tax-free u/s 10 of the Income Tax Act.

Senior Citizens Savings Scheme (SCSS): The SCSS offers 8.2 per cent interest to elderly people. The post office small savings scheme has a tenor of 5 years and qualifies for tax deductions under section 80C. The interest on the scheme is payable quarterly. Retired employees between 55 and 60 years and retired defence employees above 50 years can opt for this investment if they enter the scheme within a month of receiving retirement benefits.

These schemes can help senior citizens accumulate wealth after retirement with assured returns and low-risk. With the exception of bank fixed deposits, all schemes are backed by the government. Elderly people can avail tax benefits as well.