The Reserve Bank of India has reduced its repo rate by 25 basis points, from 6.50% to 6.25 percent. A repo rate cut is good news for borrowers as this reduces EMI burden but bad news for FD investors. This is because FD investors have now one final chance to book their fixed deposit investments at current higher rates, as banks will begin to reduce their interest rates soon. If you are a senior citizen and have a surplus to invest in FDs, this may be the best time to make your deposits, as the current high rates may not be available in the coming months.Banks offering highest FD interest rates currently
Here is the list of small finance banks, private banks and public banks offering the highest interest rates for senior citizens.
Small Finance Banks offering up to 9.55
Currently, the small finance banks are offering the highest interest rates on the senior citizens fixed deposits. Unity Small Finance Bank is offering the highest FD interest rate at 9.5% per annum for 1001 days. Other small finance banks, such as Suryoday Small Finance Bank, are giving FD interest rates of 9.1% per annum for a 5-year term, while Utkarsh Small Finance Bank is giving 9.1% per annum for a 2-3-year FD tenure.
Here is the list of small finance banks offering highest FD interest rates to senior citizens:
| Bank Name | Interest Rate (%) | Tenure |
| AU Small Finance Bank | 8.6 | 18 months |
| 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 |
| NorthEast 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 |
Private Sector Banks offering up to 8.55%
FD interest rates among private banks range between 7.5% to 8.75% per annum. Bandhan Bank offers the highest FD interest rate at 8.55% per annum for the 1-year tenure. On the other hand, DCB Bank offers the highest interest rate at 8.55% per annum for 19-20 months tenure and SBM Bank is offering the highest interest rate at 8.75% per annum for 18 months to less than 2 years 3 days tenure.Here is the list of private banks offering highest FD interest rates to senior citizens:
| Bank Name | Interest Rate (%) | 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 |
| DCB 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 generally offer lower interest rates as compared to small finance banks and private sector banks. Currently, public sector banks are offering FD interest rates in the range between 7.75% and 8% per annum to senior citizens.
Currently, Punjab & Sind Bank is offering the highest FD interest rate at 7.95% for 555 days tenure to senior citizens. Bank of Maharashtra is currently offering the FD interest rate at 7.95% per annum for 366 days tenure. While SBI and PNB offer 7.75% on 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 Name | Interest Rate (%) | 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 |
Lower TDS on FD interest from April 1, 2025
From April 1, 2025, the tax deducted on senior citizens’ fixed deposits will be lower. This is because the threshold for TDS deduction has been hiked to Rs 1 lakh from Rs 50,000 currently. TDS will be applicable on interest income from savings accounts, fixed deposits and recurring deposits if the total interest income exceeds Rs 1 lakh in a financial year for senior citizens.
In the case of the general public, TDS will be applicable if fixed deposit interest income crosses the threshold of Rs 50,000 in a financial year.
(Senior citizen FD interest rates are taken on February 8, 2025, as of 12 PM. The FD interest rate can change anytime now as RBI has cut the repo rate by 25 bps. Please check the latest FD interest rate before investing.)
