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What is the Senior Citizen benefit in fixed deposits?

By Finserv MARKETS - Oct 15,2019
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What is the Senior Citizen benefit in fixed deposits?

Financial savings and investment instruments are generally devised by banks and companies keeping in view the financial profile of the investor such as age, income, risk appetite and their financial goals. For investors aged above 60 years, i.e., Senior citizens who are into their post-retirement life, investment avenues tend to become increasingly fewer and traditional, owing to their age and lower risk appetite. Post-retirement, senior citizens usually prefer investment options such as fixed deposits (FDs) that fetch higher assured returns in comparison with the uncertain returns associated with the market-linked investment products. FD for senior citizens offers the dual advantage of higher returns with much needed financial safety of the invested amount.

For people aged above 60 years, Fixed Deposits available on Finserv MARKETS serve as an excellent financial investment option that offers a competitive interest rate and higher returns on the invested amount. Here are a few exclusive benefits of FD for senior citizens:

Safety of the Investment

Senior citizens invest their retirement benefits or life’s earnings in the fixed deposits and would expect utmost safety for their invested amount. FDs are not affected by market fluctuations and thus provide assured returns over the principal amount. It is quite unsurprising, for this reason, that most investors also prefer FDs during market volatilities.

On Finserv MARKETS, senior citizens can safely choose to invest in fixed deposits, given its highest credibility ratings of FAAA/Stable by CRISIL and MAAA (Stable) by ICRA that guarantee returns.

Interest Rates

The Senior citizen benefit in FD lies in the higher interest rates offered to them depending on the tenure of the FD. These rates are higher than the prevailing rates of interest for people aged below 60 years. For instance, senior citizens can avail Bajaj Finance Fixed Deposits on Finserv MARKETS with a benefit of competitive interest rates over an investment ranging from 12 to 60 months. Bajaj Finance Fixed Deposits fetches an interest rate of up to 8.95% which is an additional 0.35% over and above the existing rates of interest. Also, any future change in interest rates shall not apply on the fixed deposits of already existing senior citizen customers since the money remains locked-in for the tenure of the deposit. Upon renewal, senior citizens can avail an additional 0.1% interest, over and above the existing rates.

For example, if a senior citizen wants to invest a sum of Rs. 10,00,000 in Bajaj Finance Fixed Deposit on Finserv MARKETS for a tenure of 5 years, he/she can grow their savings by nearly 53% with an expected cumulative maturity amount of Rs. 15,35,098.

Avail Periodic Payouts

After several financial adjustments during their working years, senior citizens would want to lead a comfortable lifestyle in their post-retirement years that shall require a regular flow of money. It would be wiser for senior citizens to opt a non-cumulative mode of FD investment as they inch towards retirement. The non-cumulative FD allows for regular monthly/quarterly/half-yearly/annual payouts to the customers post their retirement. Choosing a monthly payout provides a senior citizen benefit in FD in the form of a pension to manage their regular expenses without disturbing the accumulated savings corpus.

Tax Benefits

In 2018, the Union government announced tax benefits to senior citizens for interest income earned on the FD deposits during a financial year. This provision facilitates a senior citizen benefit in FD by exempting an interest amount earned up to Rs. 50,000 from being taxed under section 80TTB of Indian Income Tax Act. So, tax-paying senior citizens can claim this Rs. 50,000 deduction from their gross total income for a given assessment year. Interest income earned beyond Rs. 50,000 from FD is subject to income tax as per eligible tax slabs. To claim this benefit, senior citizens shall have to submit Form 15H, a self-declaration form, at the time of receiving the interest amount from the financial institution, or at the time of filing annual income tax return.

Loan facility against FD

Senior citizens can easily avail a loan against their FD investment that serves as collateral to meet any personal emergencies. A certain percentage of the FD principal amount is offered as a loan to the customer. On Finserv MARKETS, senior citizens can avail a loan of up to 60% of the principal amount invested in non-cumulative FD and up to 75% of the invested amount in cumulative FD.

How can a senior citizen open a Fixed Deposit account?

Old age is accompanied by physical, and fiscal concerns for senior citizens. While Fixed Deposits are a solution to the financial concerns of senior citizens, opening an FD account can be quite a physical hassle, that may require them to be physically present in a financial institution with all the necessary documents. Opening an FD account on Finserv MARKETS can relieve the senior citizens of walking up to the bank or company to open an FD account. All that requires is to fill in the online application with personal and beneficiary details, FD amount, tenor, plan type along with uploading of the necessary documents, and depositing of the FD amount. On completion of the due process, senior citizens can regularly track their returns by accessing their FD account on Finserv MARKETS.

Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs.  We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other  benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522