Senior citizens can earn up to 8% interest rate on 3-year fixed deposits

Some of the senior citizens, despite evolving market know-how, still prefer to take a conservative route when it comes to investment. They either prefer small savings like the old traditional post office Monthly Investment Schemes (MIS), post office savings scheme or the usual bank deposits at banks.

There has, in fact, been an inclination for maintaining FDs with public-run banks instead of the new private banks due to the associated safety and familiarity.

Nonetheless, here we’ll take you through the best rates on offer for senior citizens across major public and private sector banks for a tenure of 3 years.

So, at the maximum, senior citizens channelising their funds into the Fixed deposit receipts with a deposit amount less than ₹3 crore (which are not bulk deposits) can get anywhere between 6.7-6.8 per cent return per annum.

Currently, among the major private sector banks, Yes Bank offers the highest interest rate of 7.75 per cent per annum.

For bulk deposits of ₹3 crore and above, the private lenders like Axis Bank are offering a higher rate of interest of 7.1%.

Senior citizens at Small Finance Bank can secure up to 8% per annum if they park their funds in a fixed deposit for a 3-year tenure.

Should senior citizens consider Small Finance Banks for a higher FD return?

Yes, if the risk tolerance of senior citizens allows, they can consider parking funds in fixed deposits with the Small Finance Banks. This is because these banks are also regulated by the country’s apex bank - the Reserve Bank of India. Also, deposits with them are also insured by the DICGC for deposits of up to ₹5 lakh ( for both interest and principal payment) per depositor.