How FD Is The Best Investment Options for Senior Citizens?

To lead a comfortable lifestyle, one where you not only fulfil the basic necessities but also indulge in luxuries, relying solely on your monthly income isn’t sufficient.

Devising a plan that secures your finances and multiplies your wealth is indispensable in today’s world. While numerous investment schemes rule the BFSI sector, the ones associated with market volatility often seem risky to investors. This is where a Fixed Deposit (FD) Scheme comes to their rescue. 

In a Fixed Deposit Scheme, you can lock a lump-sum amount of money with a bank or NBFC (Non-Banking Finance Company) at a fixed rate of interest for a specific period.

What makes a Fixed Deposit Scheme the ideal investment tool is its aspect of assured returns irrespective of the market conditions. As a result, you can always be at ease knowing that your capital will be rewarded with a guaranteed surplus. 

How is FD the Best Investment Option for Senior Citizens?

Opting for a Senior Citizen Fixed Deposit is especially beneficial for the said category of individuals. In the absence of a monthly income, the interest earned on a deposit can be used to meet their day-to-day expenses.

Apart from this, it is also important to note that the rate of interest offered to senior citizens is marginally higher than the usual interest rates. Generally speaking, it is 0.5% more than the standard figure. 

Financial organizations are less stringent with senior citizens when it comes to their monetary transactions, especially in the case of fixed deposits.

Banks don’t typically levy penalty charges on premature withdrawal of funds from a Senior Citizen Fixed Deposit. Moreover, lenders even pay the interest amount after a premature withdrawal.

While there are two main types of Fixed Deposits, viz. Cumulative FD and Non-Cumulative FD, the latter is a better choice for senior citizens and retired individuals. In a Non-Cumulative Fixed Deposit, the interest is calculated only on the principal amount.

Thus, investors can choose whether they wish to withdraw the interest monthly, quarterly, or annually. This is a safe mechanism of establishing a regular source of income for the elderly. It is also vital to study and compare the highest FD rates offered by various banks.

Supplementary Features of a Fixed Deposit that are Beneficial to Senior Citizens

Here are the Features of a Fixed Deposit that are Beneficial to Senior Citizens – Assured Returns, Flexible Investment Amount, Flexible Tenure, Easy Liquidity, Simple Process, etc.

  • Assured Returns

Although stocks, share markets, and mutual funds are the most renowned instruments for collecting attractive profits, the market fluctuations are too big a risk for the elderly investors to undertake.

The primary requirement of an elderly individual is to earn guaranteed returns on their investment since it acts as their source of income in the absence of a job. Hence, adopting a safer tool of increasing capital such as Fixed Deposit is a wiser decision. 

  • Flexible Investment Amount

You can open a Fixed Deposit Account by infusing as little as Rs 5,000. This flexibility allows older investors with limited pecuniary resources to multiply their wealth. This exact feature of a fixed deposit makes it an ideal investment scheme that is open for all. 

  • Flexible Tenure

You can choose your investment term, thereby determining the duration for which your funds will remain locked with the said bank. This tenure can range from a minimum of 7 days to a maximum of 10 years. Senior citizens who wish to regain their capital sooner can open an FD account for a shorter tenure.

  • Easy Liquidity

Financial emergencies can arise at any time, leaving you with a heavy cash crunch. Unlike other assets that cannot be immediately converted into cash, a fixed deposit account offers high liquidity. In case of a medical emergency, senior citizens can terminate their FD bond and acquire the necessary funds to cater to their needs. 

Check the latest – FD Interest Rates

  • Simple Process

The process of opening an FD account is very straightforward and easy. With most banks and NBFCs now managing digital services as well, you can sign up for a Fixed Deposit account completely online.

The portals are user-friendly, and with strong cyber security systems in place, old people can start investing their money in the comfort of their own homes.


It is no secret that individuals need an alternate source of income in their old age. The constant worry of dealing with a shortage of monetary resources can take away from the joys of relaxed retirement life.

The constant worry of dealing with a shortage of monetary resources can take away from the joys of relaxed retirement life.

Nevertheless, by choosing a fixed deposit scheme to secure your life savings, the assured gains can undoubtedly suffice all your necessities. By entering into an agreement with a financial institution that offers the highest FD rates, rest assured, you can enjoy a sweet retired life.

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