Senior Citizens Can Earn Up to 8.50% Interest on Five-Year Fixed Deposits

Synopsis

FD interest rate for senior citizents: Senior citizens can take advantage of attractive fixed deposit interest rates from various banking institutions. For instance, Suryoday Small Finance Bank shines by offering an impressive 8.50% on five-year fixed deposits, while DCB Bank provides a commendable 8%.

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Fixed deposit (FD) is one of the popular investment avenues for senior citizens. For senior citizens comparing FDs, the interest rate is an important factor, but it should not be the only consideration. The FD tenure, premature withdrawal rules and minimum deposit requirements are some of the other key factors that senior citizens should check before investing in FDs. Here we take you through the list of banks offering up to 8.50% interest rate to senior citizens on a five-year FD.

Small finance banks offering highest interest rates to senior citizens on 5-year FD

Among small finance banks, Suryoday Small Finance Bank is offering the highest interest rate of 8.5% to senior citizens on a 5-year FD. Jana Small Finance Bank follows with an interest rate of 8%, while Ujjivan Small Finance Bank offers 7.7%. Equitas Small Finance Bank and Utkarsh Small Finance Bank are offering a 7.5% interest rate each.

Small Finance BankInterest RateSuryoday Small Finance Bank8.50%Jana Small Finance Bank8.00%Ujjivan Small Finance Bank7.70%Equitas Small Finance Bank7.50%Utkarsh Small Finance Bank7.50%AU Small Finance Bank7.25%slice Small Finance Bank7.25%

Private sector banks offering highest interest rates to senior citizens on 5-year FD

Among private sector banks, DCB Bank offers the highest interest rate of 8% to senior citizens on the 5-year FD, followed by SBM Bank India and YES Bank that offer 7.5% each.

Axis Bank and Jammu & Kashmir Bank offer an interest rate of 7.25% each, while RBL Bank and Tamilnad Mercantile Bank offer a 7.2% rate apiece. IndusInd Bank offers 7.15%, while ICICI Bank offers a 7.1% interest rate to senior citizens on the 5-year FD.

BankInterest RateDCB Bank8.00%SBM Bank India7.50%YES Bank7.50%Axis Bank7.25%Jammu & Kashmir Bank7.25%RBL Bank7.20%Tamilnad Mercantile Bank7.20%IndusInd Bank7.15%ICICI Bank7.10%

Public sector banks offering highest interest rates to senior citizens on 5-year FD

For senior citizens, State Bank of India offers an interest rate of 7.05%, followed by Bank of Baroda at 6.90% and Punjab National Bank at 6.85%. Bank of India and Canara Bank offer a 6.75% rate each, while Indian Overseas Bank offers a 6.60% interest rate to senior citizens on the 5-year FD.

Central Bank of India, Indian Bank and Union Bank of India offer an interest rate of 6.50% each.

BankInterest RateState Bank of India7.05%Bank of Baroda6.90%Punjab National Bank6.85%Bank of India6.75%Canara Bank6.75%Indian Overseas Bank6.60%Central Bank of India6.50%Indian Bank6.50%Union Bank of India6.50%Punjab & Sind Bank6.45%Bank of Maharashtra5.50%

When is tax deducted at source (TDS) deducted from bank FD interest?

Banks are mandated to deduct TDS if interest on an FD for a senior citizen crosses Rs 1 lakh in a specific bank. Remember, TDS isn’t an additional tax; you can get it back as a tax refund or offset it against your total tax liability when you file your income tax return (ITR).

Moreover, a senior citizen can submit Form 15H (now renumbered to Form 121 under Income Tax Act, 2025) to avoid TDS deduction, if their total income, after claiming all tax deductions and the Section 87A rebate, is below the taxable limit, which is Rs 12 lakh for the new tax regime or Rs 5 lakh for the old tax regime.

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