Fixed deposits, or FDs, are one of the commonest instruments of investment in India. They are popular with both the rich and not-so-rich, men and women, the young and the old. However, with the elderly FDs have a special bonding. It’s no coincidence but there are solid reasons for this bond.
Banks offer an additional rate of interest for senior citizens – those who are above 60. This additional interest is usually 50 basis points, or 0.5 percentage points. A few banks such as Punjab National Bank (PNB) offers a second tier of additional interest for customers who are past 80 years. The additional rate of interest has helped the elderly immensely since very few of them have a pension or sources of cash generation as rental income. Let’s see what five top banks on India – SBI (State Bank of India), PNB, ICICI Bank, HDFC Bank and Axis Bank pay to its senior citizens on FDs of 1, 3 and 5-year tenures.
Interest paid by State Bank of India (SBI)
The biggest bank in the country, State Bank of India (SBI) offers 7.30% interest rate on Fixed Deposit (FD) that mature in 1 year. The rate of interest offered by the bank for FDs bearing a maturity tenure of 3 years is 7.25% and the interest rate applicable to 5-year FDs is 7.50%.
Interest rate of Punjab National Bank (PNB)
The second biggest PSU bank in India, PNB, offers 7.3% on 1-year FDs to senior citizens, For 3-year and 5-year FDs, this bank offers interest rates of 7% and 7.3% to its senior citizens. Significantly, PNB is one of the few banks that offer and extra layer of interest for super senior citizens – those above 80 years. PNB pays rates of 7.6%, 7.3% and 7.3% on FDs with maturity periods of 1 year, 3 years and 5 years for super senior citizen customers.
Interest rate offered by HDFC Bank, ICICI Bank, Axis Bank
India’s biggest private sector lender HDFC Bank pays 7.1%, 7.5% and 7.5% respectively on FDs with maturity periods of 1 year, 3 years and 5 years for senior citizens. For senior citizens, ICICI Bank offers interest rates of 7.2%, 7.5% and 7.5% respectively on FDs that mature in 1 year, 3 years and 5 years. Axis Bank is paying interest rate of 7.2%, 7.6% and 7.75% respectively for FDs bearing maturity periods of 1 year, 3 years and 5 years.
