Tamilnad Mercantile Bank has rolled out a special deposit scheme offering a 456‑day tenor with an attractive rate of 7.50% specifically for senior citizens. This option is designed for depositors seeking a short‑to‑medium term, relatively higher yield than typical savings accounts while keeping capital safety intact.
Key details of the 456‑day special deposit
- Tenor: 456 days (approximately 15 months)
- Rate for senior citizens: 7.50% per annum
- Type: Fixed / special term deposit for a defined tenure
Who stands to benefit
This scheme is aimed at senior citizens who prioritise steady income and capital protection. The fixed tenure and guaranteed interest make it suitable for retirees or those planning short‑term financial goals, such as funding medical expenses, planned travel, or bridging cashflow between larger investments.
Why senior citizens might prefer this deposit
- Higher interest than many standard savings accounts.
- Shorter lock‑in than long‑term fixed deposits, offering liquidity sooner.
- Predictable returns — interest is fixed at the outset for the full 456‑day period.
Interest payment and tax considerations
Interest on this deposit accrues at the stated annual rate. Banks typically offer different payout options — monthly, quarterly, annually, or at maturity — so choose the frequency that aligns with your cashflow needs. Note that interest income is taxable under the depositor’s applicable income tax slab.
Banks may deduct tax at source (TDS) if the aggregate interest crosses the statutory threshold. Senior citizens who meet eligibility criteria can submit appropriate declarations (such as Form 15H) to avoid TDS, subject to conditions under tax law.
How to apply
Application is generally straightforward and can be completed through the bank’s branch or, where available, via its online banking platform. Typical steps include:
- Choose the deposit amount and payout frequency.
- Provide identity and address proof to fulfil KYC requirements.
- Submit any declaration for tax exemption (if applicable).
- Complete the deposit form and receive a certificate of deposit or account confirmation.
Things to check before investing
- Premature withdrawal terms: Understand penalties and how interest is calculated if you need to break the deposit early.
- Compounding and payout frequency: Different payout options affect cashflow and effective yield.
- Auto‑renewal clauses: Check whether the deposit renews automatically at maturity and the rate that will apply on renewal.
- Documentation: Ensure eligible senior citizen proofs are submitted to claim the senior rate.
How this fits into a retirement portfolio
A 456‑day special deposit at 7.50% offers predictable, low‑risk returns and can be a useful component of a diversified retirement portfolio. It pairs well with liquid cash buffers and longer‑term instruments for balanced income and stability. As with any financial decision, compare this offering with other deposit products, consider inflation impact, and evaluate whether the tenor matches your liquidity needs.
Final thoughts
For senior citizens seeking a safe, short‑to‑medium term parking place for savings with a fixed return, this 456‑day special deposit at 7.50% can be an attractive choice. Review the specific terms at the time of application, pay attention to tax implications, and match the deposit tenor with your financial timeline before committing funds.