Tipping point

Source : BUSINESS_STANDARD
By : Business Standard
Last Updated: Mon, Dec 10, 2012 03:58 hrs

pstrongWill a fixed deposit FD jointly held with a senior citizen get the higher interest rate that senior citizens getstrongbr Yes provided the senior citizens name is the first one in the account Usually senior citizens earn an interest rate of 25-50 basis points bps more than other deposit holders Some banks give up to 75 basis points extra Also the tax on the FD will apply to the senior citizen as he is the first account holder Hence the senior citizen should fill the 15H form so that the bank doesnt deduct tax at sourceppstrongWhat happens if the first account holder dies before the deposit maturesstrongbr This is not governed by any RBI directive So while some banks offer the same rate till maturity others offer a higher rate only till the senior citizen is alive and the normal card rate after that So check with your bank before you open an FD Remember that tax will be applied on the second account holder once the senior citizen passes awayp


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