5 Reasons Why Senior Citizens Should Invest In Fixed Deposit: Fixed Deposit Calculator And More!

5 Reasons Why Senior Citizens Should Invest In Fixed Deposit: Fixed Deposit Calculator And More!

As per the government rules, retirement marks the end of the working years with - in most cases - no regular source of income that can be expected. However, in order to be prepared, everyone must plan on their finances to help maintain the desired living standards for the retirement days.

Nevertheless, when you plan on investing, minimizing risk, and earning guaranteed returns should be the main objective, especially for senior citizens. This can help safeguard the wealth an individual accumulates throughout the career years.

Though there are several investment options/schemes that are tailored for the senior citizens such as the Mantri Vaya Vandana Yojana, Pradhan Mantri Vaya Vandana Yojana (PMVVY), fixed deposits (FDs) remain the most popular choice.

Fixed deposit is a safe space for retirement considering the safety of investment and guaranteed returns, making it popular amongst most investors who are approaching retirement or already retired and investing in a low-risk option to safeguard wealth.

But why should a senior citizen choose to invest in a fixed deposit? What are the benefits for the elderly? Can a fixed deposit calculator help in any way? Let's find answers to these questions from the article below.

First Things First: What Is A Fixed Deposit?

A fixed deposit or an FD is a financial instrument that can help you grow your savings by providing a fixed rate of interest - an interest rate higher than that of a savings account. Fixed deposits offer numerous benefits. One of the great things about a fixed deposit is that it offers low-risk investment as the FD holder gets the same rate of interest rate and guaranteed returns, irrespective of market fluctuations.

However, the calculation of maturity rate of your fixed deposit account can be quite a cumbersome process. That’s where you can use an FD calculator which can determine your maturity amount by calculating the compound interest.

Fixed Deposit Calculator

Speaking of investing in fixed deposits, an obvious question to pop up is how much to invest and how much rate of interest can then be subsequently earned with the investment. A fixed deposit calculator, on those lines, helps you calculate just that.

Using a Fixed Deposit Calculator To Determine FD Interest Rate

In order to calculate the interest rate that an individual can earn in a fixed deposit, an FD calculator considers the deposit amount, FD interest rate, and tenure of the fixed deposit to calculate the maturity amount.

The formula to calculate the FD is:

Simple Interest = Principal x Rate of Interest x Time Period by 100

  • P x R x T/100

Top 5 Reasons For Senior Citizens To Invest In A Fixed Deposit

Here are 5 reasons for senior citizens to choose a fixed deposit to invest their money:

1) A Fixed Deposit Offers High Rate Of Interest To Senior Citizens

High-interest rates are offered by issuers of a fixed deposit for senior citizens as compared to regular investors. For example, Bajaj Finance insurance company, the reputable NBFCs in India, gives out an additional interest of 0.35% for senior citizens on Fixed Deposit that totals up to 8.70% for selected tenures.

In addition to that, an individual can also opt for the auto-renewal facility when applying for an FD for the maturity proceeds to be reinvested and multiply the returns. Most companies offer an additional interest rate of 0.10% on the rates that prevail.

2) A Fixed Deposit Helps To Meet Recurring And Non-Recurring Expenses

As a retiree, in addition to the daily expenses, you might also have other non-recurring expenses and goals to achieve, such as gift a property to your offspring, host a wedding, make a prepayment of your home loan, etc. And, to pay these, we recommend laddering the FDs over the tenures and aligning them to the goals.

Senior citizens can choose tenures anywhere from 12 to 60 months and also choose from various regular payout options, be it monthly, quarterly, semi-annually, and/or annually. To meet monthly expenses, choose to invest in an FD that comes with a monthly payout option like the Monthly Income Scheme Pomis or Post Office Monthly Income Scheme, and on the other hand, to meet non-recurring expenses, invest in an FD payable at maturity.

3) Fixed Deposits Pledge Collateral To Avail Loans In Emergencies

There can be no specific time for emergencies and when it comes to senior citizens, they often take the form of medical treatments. To prevent it all, it’s best to pledge an FD as collateral and avail a loan against it. Apply online and access a sanction without breaking your investment and also a chance to earn interest on it until maturity.

4) Bank Fixed Deposits Offer Guaranteed Returns

Unlike other equities, fixed deposits are not linked to the market. This means that the interest rate remains unchanged throughout the tenure with assured returns. Furthermore, to help you determine your returns, it’s advisable to use an FD calculator to plan your finances.

5) It's Easy To Invest And Monitor In Fixed Deposits

There are no hassles when you invest in a fixed deposit, all you need to do is fill and submit an application form and make a payment.

You can either visit the nearest branch or apply online, as per your comfort and choice and invest using your debit card. On the other hand, if you want to invest in several FDs at once, opt for the multi-deposit facility and invest in up to 5 FDs using a single cheque.

Final Thoughts

Now that you are familiar with how investing in a fixed deposit benefits the Senior Citizen, we are sure you’ll make the right decision and take your first step towards smart investing.

Nevertheless, before you head towards your preferred bank, make sure to carry:

  1. A photo ID proof like your Passport, Voter ID, etc
  2. The proof of your age
  3. A copy of your residence proof, this includes Aadhaar Card, electricity bill, Passport, water bill, etc
  4. PAN Card. If you don’t have one, carry Form 60 with you
  5. And, form 15H


1) Which investment is best for senior citizens?

Here are 5 senior investment plans that you can apply for:

  • Senior Citizen Saving Scheme (SCSS) Interest rate
  • Pradhan Mantri Vaya Vandana Yojana (PMVVY)
  • Post Office Monthly Income Scheme (POMIS)
  • Bank fixed deposits (FD)
  • Floating Rate Savings Bonds

2) Why should I invest in a fixed deposit?

First things first, fixed deposits are risk-free and guarantee fixed returns. They also provide complete flexibility with regard to the tenure of investment.

3) What is the age for senior citizens for bank FD?

Senior Citizen Fixed Deposits (FDs) are offered by leading banks by ICICI, HDFC, Canara, etc to those who are over the age of 60. These are term deposit plans that have special interest rates.