RBI recently cut the repo rate by 25 basis points. After this, many banks have cut the interest rates on FD. But some banks are giving up to 9.1% interest to senior citizens on 5-year FD. This offer is on FDs of less than Rs 3 crore.
The stock market has fallen for eight consecutive days. Due to this, investors are getting disillusioned with the stock market. Experts say that investors need to diversify their portfolio. FD can be a good option in this. There is no risk in this and along with better returns, tax exemption is also available.
On February 7, 2025, RBI reduced the repo rate by 25 basis points. After this, some banks have started reducing interest rates. But some banks are giving up to 9.1% interest on 5-year FD to senior citizens. This offer is on FDs of less than Rs 3 crore. For senior citizens who file ITR under the old tax system, investing in 5-year FD is beneficial.
This is because these FDs get tax exemption under section 80C. But those who choose the new tax system do not get this exemption. Therefore, the decision to invest in 5-year FD is for both tax savings and investment. Senior citizens should decide wisely which arrangement is right for them.
Tax exemptions
Senior citizens can claim a tax deduction of up to Rs 1.5 lakh under Section 80C. They can also claim a deduction of up to Rs 50,000 every financial year from their total income under Section 80TTB. This tax deduction will also apply to the interest earned on tax-saving FDs. There is a difference between tax deduction and income tax payable. Senior citizens get tax deduction on these FDs (5-year tenure), but the maturity amount is subject to income tax as per the slab rates applicable to the taxpayer. Interest on FDs is taxable as per the tax bracket of the investors. But senior citizens are given some exemption in this.
Let us know the complete list of banks which are giving up to 9.1% interest to senior citizens on FDs of less than Rs 3 crore. Latest interest rates on FDs of banks for senior citizens:
Bank giving 9.1% interest:
According to Paisabazaar, Suryoday Small Finance Bank is giving 9.1% interest to senior citizens on 5-year FD.
Bank giving 8.65% interest:
Unity Small Finance Bank is giving 8.65% interest to senior citizens on 5-year FD.
Bank giving 8.5% interest:
Northeast Small Finance Bank is giving 8.5% interest to senior citizens on 5-year FD.
Bank giving 8.35% interest:
Utkarsh Small Finance Bank is giving 8.35% interest to senior citizens on 5-year FD.
Bank giving 8.2% interest: Jana Small Finance Bank is giving 8.2% interest to senior citizens on 5-year FD.
