3 Things to Consider While Opening a Fixed Deposit for Senior Citizens

As a senior citizen who has fulfilled their professional goals, you now want to bolster your wealth through a secure financial instrument. One that protects your capital while providing guaranteed high returns. Both these features are easy to find in a fixed deposit, provided you open one with the right bank.

Are you considering opening a fixed deposit account but are unsure which one to pick? Remember to select one based on the following three parameters.

1. Interest rate

The rate of return on your fixed deposit is perhaps the most critical factor while choosing this investment instrument. Besides, don’t forget that as a senior citizen, some banks offer a relatively higher ROI on fixed deposits as opposed to adult citizens.

Banks offer a broad spectrum of interest rates based on your FD tenures. Usually, the longer the FD, the higher the rate of return. Moreover, if you start a fixed deposit for more than 1 year, you end up taking advantage of compound interest. This increases the effective yield or total interest earned on your fixed deposit. So, before selecting a fixed deposit account, look for a trusted bank that provides a high interest rate on a senior citizen FD.

2. Partial withdrawal facility

One of the best things about a fixed deposit account is that it usually has a zero lock-in period. You can fully or partially retrieve the interest-accumulated funds, if need be. This feature allows you to stay liquid and counter any financial curveball, like unprecedented medical expenses or paying your grandchild’s education fee. If you have an FD ready, you can make a partial withdrawal without breaking your fixed deposit.

However, not all banks might extend the facility of partial withdrawals on their FDs. Some might ask you to liquidate the deposit and incur a penalty, while others might have stringent conditions on partial withdrawals. Therefore, ensure you open an FD with trusted institutions like the IndusInd Bank that allow its FD holders to make partial or premature withdrawals hassle-free.

3. Tenure flexibility and minimum amount

Define your financial objectives before starting an FD. If you want to optimise interest earnings, choose a bank that allows long-term FDs. If your goal is to open a fixed deposit for a couple of months, consider a bank that provides significant ROI on short-term FDs. The point is, choose a bank that extends a flexible tenure range so you can select an FD time frame best suited to you.

In addition to tenure, you must also have the option to invest in a fixed deposit with a small amount. After all, why should you end up losing interest on a lower amount? So, select an FD account with a bank that offers maximum tenure flexibility and a nominal deposit amount.

Over to you

There is a lot to gain from a fixed deposit if you are a senior citizen. You can use the high interest rates earned to fund your retirement, run household expenses, and pay for health-related emergencies. Therefore, pay heed to the three things mentioned above before opening your fixed deposit account and start earning healthy returns within a matter of months.