Current Fixed Deposit Interest Rates for Senior Citizens Reach 9.5%: Impact of RBI’s 25 bps Repo Rate Cut

The Reserve Bank of India (RBI) has lowered its repo rate by 25 basis points, going from 6.50% to 6.25%. This is great news for borrowers since it lightens their EMI payments, but not so great for Fixed Deposit (FD) investors. FD investors now have one last chance to secure their investments at the current higher rates before banks start cutting them down. If you’re a senior citizen with some extra cash to invest in FDs, now could be the perfect time to do it, as those high rates might not stick around for long. 

Here’s a list of small finance banks, private banks, and public banks that provide the highest interest rates for senior citizens.

Bank Names: Interest Rates: Tenure.

• – AU Small Finance Bank: 8.6% (18 months Tenure)
• – Equitas Small Finance Bank: 9% (888 days)
• – ESAF Small Finance Bank: 8.88% (888 days)
• – Jana Small Finance Bank: 8.75% (1 year to 3 years)
• – North East Small Finance Bank: 9% (18 Months 1 day to 36 months)
• – Suryoday Small Finance Bank: 9.1% (5 years)
• – Ujjivan Small Finance Bank: 8.75% (12 months)
• – Unity Small Finance Bank: 9.5% (1001 days)
• – Utkarsh Small Finance Bank: 9.1% (2 years to 3 years, 1500 days)

Small Finance Banks Offering Up to 9.55%

At present, small finance banks are providing the highest interest rates on fixed deposits for senior citizens. Unity Small Finance Bank has the top FD interest rate at 9.5% per annum for a duration of 1001 days. Other small finance banks, like Suryoday Small Finance Bank, are offering FD interest rates of 9.1% per annum for a 5-year period, while Utkarsh Small Finance Bank is also providing 9.1% per annum for fixed deposits with a tenure of 2 to 3 years.

Private Sector Banks Offering Up to 8.55%

The FD interest rates among private banks vary from 7.5% to 8.75% per annum. Bandhan Bank offers the highest FD interest rate at 8.55% per annum for a 1-year term. Meanwhile, DCB Bank also provides an interest rate of 8.55% per annum for a tenure of 19 to 20 months, and SBM Bank is offering the highest rate at 8.75% per annum for a period of 18 months to just under 2 years and 3 days.

Here’s a list of private banks that provide the highest fixed deposit interest rates for senior citizens:

Bank Names: Interest Rates: Tenure

• – Axis Bank: 7.75 (15 months to less than 2 years; 5-10 years)
• – Bandhan Bank: 8.55 (1 year)
• – City Union Bank: 8 (333 days)
• – CSB Bank: 8 (501 days)
• – DBS Bank: 8 (376 days to 540 days)
• – DBCS Bank: 8.55 (19 months to 20 months; above 26 months to less than 61 months)
• – Federal Bank: 8 (444 days)
• – HDFC Bank: 7.9 (4 years 7 months, 55 months)
• – ICICI Bank: 7.85 (15 months to less than 18 months)
• – IDFC First Bank: 8.4 (400 days to 500 days)
• – IndusInd Bank: 8.49 (1 year 5 months to less than 1 year 6 months)
• – Jammu & Kashmir Bank: 7.5 (333 days; 1 year to less than 3 years)
• – Karur Vysya Bank: 8.1 (760 days – Special Deposit)
• – Karnataka Bank: 8 (375 days)
• – Kotak Mahindra Bank: 7.9 (390 days to less than 23 months)
• – RBL Bank: 8.5 (500 days)
• – SBM Bank India: 8.75 (Above 18 months to less than 2 years 3 days)
• – South Indian Bank: 7.9 (1 year 7 days; 18 months)
• – Tamilnad Mercantile Bank: 8.1 (300 days; TMB300)
• – YES Bank: 8.5 (18 months)

Public Sector Banks Offering Up to 7.55%

Government banks typically provide lower interest rates compared to small finance banks and private sector banks. At present, public sector banks are offering fixed deposit interest rates ranging from 7.75% to 8% per annum for senior citizens.

Currently, Punjab & Sind Bank has the highest FD interest rate at 7.95% for a tenure of 555 days for senior citizens. Bank of Maharashtra is also offering an FD interest rate of 7.95% per annum for a tenure of 366 days. Meanwhile, SBI and PNB are providing 7.75% for tenures of 444 days and 400 days, respectively.

Here is the list of public sector banks offering the highest interest rates on FD to senior citizens:

Bank Names: Interest Rates: Tenure

• – Bank of Baroda: 7.8 (400 days Bob Utsav)
• – Bank of India: 7.8 (400 days)
• – Bank of Maharashtra: 7.95 (366 days)
• – Canara Bank: 7.9 (3 years to less than 5 years)
• – Indian Bank: 7.8 (400 days – IND SUPER)
• – Indian Overseas Bank: 7.8 (444 days)
• – Punjab National Bank: 7.75 (400 days)
• – Punjab & Sind Bank: 7.95 (555 days)
• – State Bank of India: 7.75 (444 days – Amrit Vrishti)
• – Union Bank of India: 7.8 (456 days)

Reduced TDS on FD Interest Starting April 1, 2025

Beginning April 1, 2025, the tax deducted at source (TDS) on fixed deposit interest for senior citizens will be reduced. This change is due to the increase in the TDS deduction threshold from Rs 50,000 to Rs 1 lakh. For senior citizens, TDS will only apply to interest income from savings accounts, fixed deposits, and recurring deposits if their total interest income exceeds Rs 1 lakh in a financial year.

For the general public, TDS will still be applicable if the interest income from fixed deposits surpasses Rs 50,000 in a financial year.

(Note: The FD interest rates for senior citizens were last updated on February 8, 2025, at 12 PM. These rates may change as the RBI has recently lowered the repo rate by 25 basis points. It’s advisable to verify the current FD interest rates before making any investments.)