Archive · 29 Aug 2026
Senior Citizens Can Earn Up to 8.5% on Five-Year FDs
A fixed deposit lets people keep money in a bank for a set time and earn interest.
Senior citizens usually receive a higher interest rate than other depositors.
Some small finance banks in the list offer rates as high as 8.50%.
Suryoday Small Finance Bank lists 8.50% for five-year deposits.
Private and public-sector banks generally offer different rates, so comparing them can help investors earn more.
However, a higher rate may require checking the bank’s financial strength and withdrawal rules.
FD interest is taxable and is not completely tax-free for senior citizens.
Eligible senior citizens may claim a deduction of up to ₹50,000 on deposit interest, subject to the stated conditions.
Senior citizens can receive FD rates of up to 8.50% from selected small finance banks.
Suryoday Small Finance Bank offers the highest listed five-year rate at 8.50%.
Among private banks, DCB Bank lists an 8.00% five-year rate, while SBM Bank lists 7.50%.
State Bank of India offers the highest listed five-year public-sector bank rate at 7.05%.
Rates apply to deposits below ₹3 crore and were stated as updated on 26 August 2026.
- Who
- Senior citizens investing in fixed deposits, along with banks offering senior-citizen FD rates.
- What
- Banks are offering senior-citizen fixed-deposit rates ranging up to 8.50%, depending on the bank and tenure.
- When
- The listed rates were stated to be updated on 26 August 2026; the tax provisions mentioned apply from 1 April 2026.
- Where
- At small finance, private-sector and public-sector banks in India.
- Why
- Comparing rates and tenures can help senior citizens improve interest income while considering risk, liquidity and tax implications.
Higher Returns
Greater Caution
Choosing a bank
Higher Returns
Investors may prefer small finance banks because some offer the highest listed rates, reaching 8.50%.
Greater Caution
Investors may prioritize a bank’s financial strength, deposit insurance limits and other safety considerations over the highest rate.
Selecting a tenure
Higher Returns
Locking money into a longer or better-paying tenure can increase total interest income.
Greater Caution
Longer commitments can reduce flexibility, so premature-withdrawal rules should be checked before investing.
Tax impact
Higher Returns
The stated deduction of up to ₹50,000 can reduce taxable eligible deposit interest for senior citizens.
Greater Caution
FD interest remains taxable, and the deduction is not an exemption that makes all interest tax-free.
- Highest listed rate
- 8.50% for senior-citizen deposits.
- Highest five-year rate
- Suryoday Small Finance Bank lists 8.50%.
- Private-bank example
- DCB Bank lists 8.00% for a five-year senior-citizen FD.
- Public-sector example
- State Bank of India lists 7.05% for a five-year senior-citizen FD.
- Deposit limit
- The listed rates apply to deposits below ₹3 crore.
- Interest deduction
- Eligible senior citizens can claim a deduction of up to ₹50,000 on deposit interest under Section 153, subject to applicable conditions.
- TDS threshold
- For specified deposits, the stated threshold is ₹1 lakh for senior citizens and ₹50,000 for other individuals.