Here’s How Senior Citizens Can Beat Inflation with FDs
Fixed deposits are a great way to stow away your funds to keep them safe and sound while also capitalising gradually into higher interest returns in a steady and consistent fashion. One sector of society that truly believes in the massive growth potential and security of FDs is, lo and behold, the senior citizens.
It is imperative, hence, to let senior citizens know that the time to secure an FD investment is now, since inflation is at a stooping low of 6.77%. The senior citizen FD interest rates have risen and this only means that booking an FD now would promise you amazing returns for the longer run. Taking this into consideration primarily, let’s see how exactly fixed deposits are a basket of various financial advantages for senior citizens.
Advantages of Saving in a Fixed Deposit for Senior Citizens
Senior citizens are not only offered safe and secure investment options through fixed deposits, but they are also offered consistent returns, growth of money and greater tax benefits. Given below are explanations of how beneficial FDs can be for senior citizens.
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Safe Savings Option
A fixed deposit is one of the safest investments and savings alternatives. The rate decided at the inception of your FD account remains until the tenor ends despite any fluctuations in the market. If there is any rise or fall in fixed deposit rates, your pre-decided interest returns will keep flowing in which is one of the greatest benefits for senior citizens who require a form of concrete monetary source for financial freedom despite retirement, with some of the highest fixed deposit interest rates on the market to add as a cherry on top.
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Consistent and Predictable Returns
Other forms of investments, for instance the infamous stock market, are highly unpredictable and playing such investments feels like a storm of the ocean. Fixed deposits on the other hand provide senior citizens with the stability they require through returns and senior citizen FD interest rates that are consistent and that can be predicted or estimated through prior calculations.
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Tax Benefits
As an alternate income, fixed deposit incomes undergo yearly tax deductions. However, senior citizens receive special rights when it comes to paying taxes on their FD returns. For example, a regular citizen would pay 10%/20% and above in taxes ₹40,000 onwards. However, the returns of a senior citizen aren’t branded with that tax bracket until they touch ₹50,000, giving them a benefit of ₹10,000 over the regular citizens.
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Safety and Growth of Capital
Fixed deposits are both a tool to save money as well as an investment option. You can park your capital in a fixed deposit to preserve it and watch your saved money grow exponentially through your high fixed deposit interest rate. For senior citizens, this is a win-win since the interest returns work as stable income while the savings side of an FD prepares them for unforeseen emergencies along with offering them special senior citizen FD interest rates.
Returns on FD
Here are a few examples of the stark difference between the regular FD interest rates and senior citizen FD interest rates, hinting towards why senior citizens could benefit greatly from FDs.
| Bank/NBFC | Interest Rates (Non-senior Citizens) | Interest Rates (Senior Citizens) |
| HDFC Bank | 6.25% | 6.50% |
| Kotak Mahindra Bank | 6.30% | 6.55% |
| ICICI Bank | 6.35% | 6.60% |
| PNB Housing Finance | 7.55% | 7.80% |
| LIC Housing Finance | 7.40% | 7.65% |
The Effects of Inflation Dips
As compared to September 2022’s 7.41%, October 2022’s retail inflation has faced a sharp decline to 6.77% in India. Hence, as a senior-citizen fixed deposit investor or saver, you must wonder how you are affected and how you can manoeuvre around the inflation decline.
Since inflation has declined by a sizable margin, the money you now save holds more value than it did even just a month ago; inflation is simply money losing value, resulting in the increase in the prices of goods and services. Hence, beating the inflation algorithms to work in your favour is most crucial.
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Highest Fixed Deposit Interest Rates
The inflation decline has directly affected FD interest rates heavily. FD interest rates have increased, hence, increasing your fixed deposit returns. Added to that is the array of the highest fixed deposit interest rates on the market that senior citizens enjoy with a hike of 0.25%. The senior citizen FD interest rates can be exponentially higher.
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Non-cumulative Long-term FDs
A decline in inflation and an incline in FD interest rates is your golden chance to preserve these enormous returns for up to 10 years. Additionally, choosing a long-term non-cumulative FD is a sure way to solidify a consistent returns schedule since the interest returns brought by cumulative short-term FDs are comparatively lesser and last a shorter while.
It is a widely known fact that senior citizens believe strongly in the potential of fixed deposits. You, as a senior citizen, truly believe in the growth, stability and consistency that FDs can provide you with. With the inflation on a low, this is your chance to strike and secure the highest fixed deposit interest rates you can through a non-cumulative long-term fixed deposit. You could have the higher ground with a 0.25% hike in senior citizen FD interest rates; hence, securing your success and financial stability can be cake-walk for you.
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