State Bank of India (SBI) and few private banks (ICICI and HDFC) have launched special fixed deposit schemes for the senior citizens of the country. These fixed deposit schemes are provided for safeguarding the interest of senior citizens as the rate of interest of FD is falling at a rapid rate. These banks are offering an extra rate of interest on the existing rates that are applicable for the senior citizen fixed deposits.
TDS or Tax Deduction at Source is a method of deducting the tax at the income source. When we talk about NBFCs, fixed deposits, and Banks the tax from the interest accrued before crediting it to the account of the depositor. However, in the case of cumulative payment of interest, TDS is charged as per the interest accrued, which is yearly, half-yearly, quarterly, or monthly.
The rate at which the tax is deducted for the interest earned by senior citizen fixed deposits is 10% when the interest earned exceeds Rs. 50, 000 opposed to regular citizen's interest earned, which is Rs. 40,000.
A senior citizen should check the following documents for opening a fixed deposit account in any non-banking financial institution or bank:
The majority of the Indian banks consider senior citizens to those people who are of or more than 60 years.
In addition to this, there are some banks and financial institutions who consider super senior citizens also. Super senior citizens are those who are more than 80 years. These are the people who are given extra interest rates on fixed deposits over the interest rates that are offered to the senior citizens.
The senior citizens get the following advantages with a fixed deposit account:
If you want to know which bank is the best for fixed deposits, then the aforementioned description must have given you the answer. Under the FD schemes of these banks, the senior citizens get special interest rates.