The abovementioned benefits of fixed deposits can be availed only if you are a senior citizen and looking to invest in something safe and of high returns; select small finance banks offer their fixed deposits (Fds) to be much higher than charges that are normally levied by a majority of the banks reducing their interest rates of Fds. A few still managed to give as attractive rates of interest up to 9.1% for a three-year period.
Best Banks With The Highest FD Rates For Senior Citizens
Following are the names of some small finance banks offering high-interest rate FDs for senior people:
- Utkarsh Small Finance Bank – 9.1%.
- Northeast Small Finance Bank-9%.
- Jana Small Finance Bank-8.75%.
- Suryoday Small Finance Bank- 8.75%.
- Unity Small Finance Bank-8.65%.
- Equitas Small Finance Bank-8.25%.
(Source: Paisabazaar.com, April 23, 2025)
Reasons to Invest in FDs Now
The repo rate has been reduced by the Reserve Bank of India (RBI), which prompts some major banks to cut their interest rates on fixed deposits. This opens the way for senior citizens who have been looking for better returns on savings in making investments in small finance banks.
Major Considerations Before Investing
These high-interest FDs are enticing for senior citizens but wise investing is essential.
- DICGC Protection: Deposit Insurance Credit Guarantee Corporation (DICGC) offers coverage for deposits up to ₹ 5 lakh. Keep your investment within this limit to be on the safer side.
- Bank Stability: Small finance banks may have attractive rates, but check the financial health before you invest in them.
- TDS Rules: As per Budget 2025, TDS will be deducted if your FD interest exceeds ₹1 lakh in a financial year. However, if your total tax liability is zero, you can avoid TDS by submitting Form 15H.
Way of Saving for TDS using Form 15H
Form 15H can save a senior citizen without tax liability from TDS on FD interest, even if the total income exceeds ₹3 lakh. Ensure you are within the stipulated eligibility criteria before filing.