After retirement, the biggest priority of senior citizens is regular income and 100% security of their deposits. For senior citizens who are away from the ups and downs of the stock market, the country’s largest public sector bank, State Bank of India (SBI), offers attractive interest rates on fixed deposits (FD). In SBI, senior citizens aged 60 years and above are eligible as compared to general customers. Additional interest ranging from 0.50% to 1.00% Are being given. In particular, SBI’s ‘WeCare’ on long-term deposits and additional premium interest rates on FDs of 5 to 10 years help senior citizens get better returns on their retirement funds.
SBI interest rates for senior citizens on different tenures start from 3.55% to 7.05% per annum:
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1 year to less than 2 years: 6.75% per annum
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2 years to less than 3 years: 6.95% per annum
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3 years to less than 5 years: 6.80% per annum
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From 5 years to 10 years (long term): 7.05% per year
(Note: Bank interest is calculated on Quarterly Compounding basis, which increases the effective annual return on a cumulative basis).
If a senior citizen deposits a lump sum amount of ₹10 lakh in Cumulative/Re-investment Fixed Deposit of SBI, the estimated interest earned over different tenures and the total maturity amount will be as follows:
| Investment Tenure | Senior Citizen Interest Rate | Total Interest Earned (Approx) | Total Maturity Amount (Principal + Interest) |
| 1 Year | 6.75% | ₹69,230 | ₹10,69,230 |
| 2 Years | 6.95% | ₹1,47,700 | ₹11,47,700 |
| 3 Years | 6.80% | ₹2,23,500 | ₹12,23,500 |
| 5 Years | 7.05% | ₹4,17,450 | ₹14,17,450 |
| 10 Years | 7.05% | ₹10,09,160 | ₹20,09,160 (more than double the money) |
(With the effect of compounding over a period of 5 to 10 years, a net interest of more than ₹ 10 lakh is earned on the original capital of ₹ 10 lakh in 10 years, taking the total fund to cross ₹ 20 lakh).
If senior citizens want regular income for their monthly expenses or medicines instead of waiting till maturity, they Non-Cumulative FD (Non-Cumulative / Monthly Interest Payout) Can choose:
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On depositing ₹10 lakh on 5 year FD (7.05% interest rate) approx. ₹5,800 to ₹5,875 per month Fixed regular income can be obtained.
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If Quarterly Payout is chosen, approximately Rs. 1 lakh will be deposited directly into the bank account every three months. ₹17,625 Interest is credited.
Senior citizens enjoy special financial protection under the Income Tax Act on FDs:
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Tax exemption up to ₹50,000 under Section 80TTB: According to Section 80TTB of the Income Tax Act, senior citizens do not have to pay any tax on interest earned from FDs and savings accounts up to a total of ₹ 50,000 in a financial year.
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TDS limit: The bank deducts TDS at the rate of 10% only if the total interest exceeds ₹50,000 in a financial year.
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Avoid TDS by submitting Form 15H: If the total annual income of the senior citizen is less than the taxable slab, they can visit the bank branch at the beginning of the financial year. ‘Form 15H’ Can deposit, after which the bank deducts zero TDS.
Senior citizens can open an FD account in SBI by visiting their nearest bank branch and giving Aadhar card, PAN card, two passport size photographs and age certificate. If you already have SBI savings account and internet banking or SBI YONO App If so, then you can book FD online without any paperwork in just two minutes sitting at home by going to ‘e-TDR / e-STDR’ option.