Best FDs For Senior Citizens: Best Fixed Deposits With Up To 8% Annual Return | Check Full List

Best FDs For Senior Citizens: As the Reserve Bank of India (RBI) announced multiple repo rate cuts in the past few months, several banks have reduced interest rates on fixed deposits. However, senior citizens can still get up to 8% of interest rates on FDs by some banks.

These higher FD interest rates for senior citizens are mainly from small finance banks, and investors also need to factor in tax deducted at source rules and deposit insurance limits.

Best FD Rates

Suryoday Small Finance Bank currently offers the highest listed rate, paying 8% on five-year fixed deposits for senior citizens. Jana Small Finance Bank follows with 7.77% for the same tenure, while Ujjivan Small Finance Bank provides 7.7%. Several other small finance banks also quote more than 7% on similar deposits, which may appeal to retirees seeking higher regular returns.

FD interest rates for senior citizens: bank-wise comparison

According to data from Paisabazaar.com, updated on January 2, 2026, FD interest rates for senior citizens over five years vary across small finance banks. AU Small Finance Bank offers FD interest rate of 7.25% for a five-year tenure, Equitas Small Finance Bank offers an interest rate of 7.5%, whereas ESAF Small Finance Bank offers an interest rate of 7.5%, Jana Small Finance Bank offers interest rate of 7.77% on FD for the same tenure, Shivalik Small Finance offers interest rate of 6.75%, and slice SFB offers an FD interest rate of 7.25%, Suryoday SFB offers an 8% interest on FD, whereas, Ujjvan SFB offers an interest rate of 7.7%, Utkarsh SFB offers an interest rate of 7.5%.

FD Interest Rates For Senior Citizens, TDS Rules

Banks must deduct tax at source when FD interest for a senior citizen crosses Rs 1 lakh in a year with that bank. TDS is not an extra tax, because it can be adjusted while filing the income tax return. Any excess TDS can be claimed back, and interest may also be payable on the tax refund, subject to rules.

Under the new tax regime for FY 2025-26, a senior citizen with total income of Rs 11 lakh has no final tax payable because of the Section 87A rebate. This rebate now covers income up to Rs 12 lakh. So many senior citizens earning FD interest may technically fall below the effective tax threshold, despite TDS still being cut during the year.

Senior citizens can submit Form 15H to the bank to avoid TDS if total income, after deductions and the Section 87A rebate, stays under Rs 12 lakh in the new tax regime or Rs 5 lakh in the old regime. Banks are not aware of each depositor's final tax position, so they must deduct TDS once interest exceeds Rs 1 lakh unless Form 15H is on record.