Benefits of Fixed Deposits for Senior Citizens

For senior citizens, most of whom are without an active income, capital protection assumes more significance than capital gains. A senior citizen fixed deposit addresses this need pretty well. The principal deposit remains safe from erosion due to market fluctuations.

This is another significant benefit of afixed deposit for senior citizen. The returns are guaranteed and not market-linked. If you are a senior citizen opting this deposit, the rate of interest remains fixed throughout the deposit’s tenure and will not change till maturity.

As many senior citizens depend on income from fixed deposit to meet their day-to-day expenses, interest income from such a deposit enjoy a higher tax exemption. For senior citizens, interest income up to Rs. 50,000 is exempted from taxation, which is Rs. 10,000 in case of regular deposits for individuals below 60.

Asenior citizen fixed depositcan be an ideal investment for building an emergency corpus as it can be easily liquidated. In other words, the deposit can be broken before maturity to avail funds in case of a contingency, after paying a penalty.

Asenior citizen fixed depositcan be a source of additional income in the old age up and over pension (if any). Non-cumulative senior citizen fixed depositspay interest on a monthly or quarterly basis as per the mandate. This helps take care of post-retirement expenses.

A senior citizen FD doesn’t involve cumbersome paperwork. Senior citizens holding an account with a bank or post office need to fill-up the deposit form, mentioning the amount they want to deposit. Also, most financial institutions offer the facility of online applications or even coming to the depositor’s residence to help open an account.

With such a large number of benefits, asenior citizen fixed depositis a de facto choice for the elderly. Not only they offer peace of mind but also ensure senior citizens can take care of their range of post-retirement needs with utmost ease.

Advisors at Aditya Birla Capital help you make the most of your money . Talk to our advisors today to know more.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product.  Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.