A fixed deposit is one of the most popular investment products in India. It is especially beneficial for those unwilling to invest in high-risk financial instruments such as equity and mutual funds.
Its greatest advantage is that it is a relatively stable investment option that offers consistent returns. Thus, fixed deposits are ideal investments for senior citizens who are looking for predictable returns with flexible tenures and payout options.
Fixed deposit interest rates have seen fluctuations in the past year. Shriram Finance continues to offer fixed deposits to senior citizens with attractive interest rates along with facilities such as online FD access.
Fixed Deposit for Senior Citizens
Here are 11 things you must know about Fixed Deposit for senior citizens in India:
1. What is a Fixed Deposit?
A Fixed Deposit (FD) is a savings instrument offered by financial institutions wherein you deposit a principal amount for a specified period at a fixed interest rate. By choosing a non-cumulative FD, you receive interest on your investment depending on the frequency of interest payment you opt for, i.e. monthly, quarterly, half-yearly or yearly. If you choose cumulative FD, once the FD matures, the principal & Interest amount are paid at maturity.
2. Is FD for Senior Citizens Relatively Stable?
Fixed deposits offered by financial institutions are rated by credit rating agencies so that investors can make a wise decision before zeroing in on one, indicating a high degree of safety.
3. Who is Eligible to Invest in a Fixed Deposit?
Eligibility criteria vary from one financial institution to another.
To invest in an FD, typically, you must belong to any of the following categories:
- An Indian resident
- Partnership Firms
- Hindu Undivided Family
- Trust and foundations
- Unincorporated Association or Body of Individuals
- Public or Private Companies
To avail additional interest rates for senior citizens, one must be 60 years or older.
4. What is the minimum amount that I can put in a Fixed Deposit?
The minimum amount you can book a fixed deposit with varies according to the financial institution. With Shriram Finance, you can start investing with a minimum deposit of just ₹ 5,000. Deposits will be accepted in multiples of ₹1,000.
5. What is the Duration Tenure of Investment in an FD Account?
The tenure of an FD account varies from one financial institution to another. Typically, you can open a fixed deposit with a minimum tenure of 12 months to a maximum tenure of 60 months.
6. How much Interest will I gain on my investments?
Interest gained depends on your principal, interest rate, tenure, and whether it is a cumulative or non-cumulative scheme.
If you are planning to invest in Shriram Fixed Deposit, you can choose between cumulative and non-cumulative options, along with attractive FD interest rates for senior citizens.
- Special Fixed Deposit Rates for Senior Citizens: Senior citizens will receive an additional 0.50%* p.a. rate of interest on an FD.
With Shriram Finance FD calculator, you can also calculate the interest earned on your income and calculate the maturity amount easily!
7. How Will I Receive the Interest Amount on FD?
The interest amount is generally credited to the linked bank account on a monthly, quarterly, half-yearly, yearly basis or at maturity.
8. Can I Break a Fixed Deposit before Maturity?
In case you require funds urgently, you may be able to avail a premature withdrawal from your fixed deposit account. Most financial institutions give you an option to break your FD before maturity for any unforeseen situations. However, you might be charged a penalty for premature withdrawal. And the specific policies for premature withdrawal may differ from one financial institution to another.
9. Is Nomination Facility Available for Fixed Deposit Schemes?
Yes, most financial institutions offer a nomination facility on their fixed deposits. This allows you to appoint a nominee who can receive the deposit amount in the event of the account holder’s death. You can add or change the nominee at the time of opening the FD or later by submitting a request to the bank or financial institution.
10. Can I Open an Online Deposit Account?
Shriram Fixed Deposit offers customers the facility to open an online FD to ensure a faster and hassle-free experience. No more standing in long queues!
Conclusion
This article outlines the important features and considerations related to fixed deposits for senior citizens. With the ability to yield a relatively stable interest rate compared to other fixed-income investment options, a fixed deposit is one of the good investment schemes, especially for senior citizens who are looking to fast-track their savings. Don’t wait - invest in FD today and enjoy assured returns on your investment.