Following the Reserve Bank of India’s (RBI) 40 basis point increase in the repo rate to 4.4 percent (100 basis points = 1 percentage point) in May, several lenders, including Axis Bank, Kotak Mahindra Bank, Canara Bank, and Bank of India, raised interest rates on three-year fixed deposits (FDs) for senior citizens. According to BankBazaar data, smaller private sector banks now offer rates of up to 7.1 percent on three-year FDs for senior citizens.
Overview
Senior citizens should invest a portion of their savings in FDs, which provide liquidity and periodic interest income. The savings can be used to build an emergency fund. Here are the banks with the best three-year fixed-rate mortgages for senior citizens.
Senior citizens can earn 7.10 percent on three-year fixed-rate deposits with DCB Bank. This lender has the lowest interest rates among private sector banks. In three years, Rs 1 lakh investment grows to Rs 1.24 lakh.
Bandhan Bank, IndusInd Bank, and Yes Bank all offer 7% interest on three-year fixed deposits for senior citizens. In three years, Rs 1 lakh investment grows to Rs 1.23 lakh.
Senior citizens can earn 6.8 percent on three-year fixed-rate deposits with RBL Bank. In three years, a Rs 1 lakh investment grows to Rs 1.22 lakh
Senior citizens can get 6.25 percent interest on three-year fixed deposits from Axis Bank, Federal Bank, IDBI Bank, and Kotak Mahindra Bank. In three years, Rs 1 lakh investment grows to Rs 1.20 lakh.
To attract new deposits, small finance banks and smaller private sector banks are offering higher interest rates. The Deposit Insurance and Credit Guarantee Corporation, an RBI subsidiary, guarantees fixed deposit investments of up to Rs 5 lakh.
The FD data is as of June 1, according to lender websites. Interest rates are for seniors aged 60 to 80. (deposit amount below Rs 1 crore). For data compilation, all BSE-listed private sector banks are considered. Banks for which no verifiable data is available are not permitted.
