Senior citizens have always preferred fixed deposits in India over other instruments. This is because it not only provides safety of the invested amount but they can also generate regular income from it by investing in a non-cumulative FD that offers periodic payouts.

Among fixed income instruments, recurring deposits or RD also offer a high-interest rate and safety of your deposits. However, there is much difference between RD and FD especially when it comes to the interest calculation method. FD accrues interest for the lump sum amount for the complete tenor whereas only the first deposit accrues interest for the entire tenor when you invest in an RD.

Also, some banks and NBFCs provide higher interest rates to senior citizens. You can get these interest rates only if you are above 60 years of age. However, banks have already lowered the interest rates of their fixed deposit plans due to the repo rate cuts done by RBI. Therefore, the interest rates will not be high enough even if you get an extra interest rate for being a senior citizen.

For ensuring high returns with a senior citizen FD, you can adopt these ways:

Invest in corporate FDs

Repo rate cuts have not affected corporate FD schemes and therefore, you can earn higher interest by one of these FD schemes. Also, you can expect to earn better returns by depositing your savings for a longer tenor as the interest gets compounded after every three months.

For example, Bajaj Finance provides an interest rate of up to 7.35% to senior citizens which is 0.25% more than the interest rates offered to regular investors. It also provides the option of monthly, quarterly, bi-annual, and annual interest payouts. This means that you can book a non-cumulative FD with a monthly interest payout option to cover your regular expenses.

There is no need to visit a branch office or bank for opening an FD as Bajaj Finance has provided the online account opening facility to its customers. Therefore, you just have to visit its official website and fill an FD online form to book an FD. Also, the investments can be tracked online with Experia – your online account expert. Moreover, you don’t have to worry about your deposits as these FDs are credited as safe by credit rating organizations like CRISIL and ICRA.


Use FD as an income source

Fixed deposits can be used for earning a regular income by investing in non-cumulative FDs that even provide monthly interest payouts. These payouts can be used to cover your medical bills and other expenses easily.

The returns and monthly payouts can be calculated with the help of an FD return calculator which you can find on the website of your financier.

Deposit in multiple FD accounts

In case of a financial emergency, you might have to withdraw an FD prematurely. By withdrawing an FD prematurely, you will lose the interest that you were supposed to get at maturity. However, you will not have to break the entire deposit amount if you deposit in multiple FD accounts.
  • To get better liquidity options can also ladder your deposits by investing in fixed deposit plans of different tenors.
  • Bajaj Finance allows you to choose a flexible tenor from 12 to 60 months for your FD. Also, the option of a multi-deposit facility will enable you to invest in multiple FDs of varying tenors with ease.
Senior citizens prefer to invest in a fixed deposit in India as it is safe and ensures high returns. The banks have lowered their fixed deposit interest rates due to the tough economic situation and repo rate cuts. To continue to earn better returns, you can ladder your deposits. Corporate fixed deposits like Bajaj Finance FD provide a high-interest rate of up to 7.35% to senior citizens. You also get the option of opening and managing your FD account online by investing in these FDs. Your investment is safe in these FDs and you also get the option of investing in several FDs with one cheque.


Author Bio:


Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at HighlightStory.