Senior Citizen FD Interest Rate: Public and private banks have already increased the interest rates on fixed deposits . Thereby allowing customers to get higher interest rates on their deposits. Opting for Fixed Deposit (FD) . You can invest in low-risk financial instruments from banks, non-banking financial institutions and post offices.
Senior Citizen FD Interest Rate
Tamil Nadu Power Finance and Infrastructure Development Corporation Limited is one such government company that is offering very attractive interest rates on Fixed Deposits (FDs) . The company has decided to offer 8.5 percent interest rate to senior citizen customers. At present, the company has offered two options to the investors. One is Non Cumulative Fixed Deposit and the other is Cumulative Fixed Deposit.
Non-Cumulative FD
Investments under Fixed Deposit (FD) can earn interest monthly, quarterly and annually. When the fixed deposit matures, they can withdraw their investment. This fixed deposit can be done for tenures of 2,3,4 and 5 years. The interest rates on this for non-senior citizens range from 7.25 percent to 8 percent depending on the tenure.
Senior Citizen FD Taxation
Interest received on deposits kept in banks, co-operative banks or post offices is tax-exempt under the recent section 80TTB of the Income Tax Act. A senior citizen can claim deduction from total income before tax up to Rs 50,000 in interest income generated from these organizations. Also no TDS will be deducted from interest payments up to Rs 50,000 made in a financial year. A senior citizen can submit Form-15H to the bank for withholding TDS deduction.
Documents for opening FD for Senior Citizens
Along with the correctly filled KYC form you will need to provide proof of identity such as PAN, address proof, voter ID, passport, and recent color photographs. The bank staff will verify your age using the documents provided by you to be eligible to invest in FD as a senior citizen. In most cases, the bank follows the definition of a senior citizen by the Income Tax Act.
Fixed Deposit Tenure
Banks have prescribed a minimum and maximum period for which a fixed income account can be opened. FDs can generally be kept for a minimum of 7 days and a maximum of 10 years. Within this limit you have the option to choose the tenure.
