Pre-Budget Expected Changes In FD Interest Rates Tax For Senior Citizens And Others, Current Scenario

Ahead of the Union Budget 2025-26, State Bank of India has published a research report, predicting a transition to a new tax regime, potential changes in fixed deposit interest rates, and an increase in savings accounts tax exemption limits.

The report, titled 'Prelude to Union Budget 2025-26', suggested that a flat 15 per cent tax on interest earned from fixed deposits (FDs) across all maturities may be introduced in the latest budget, set to be presented by Finance Minister Nirmala Sitharaman on February 1.

Proposed FD Interest Tax Reforms

Currently, the tax on fixed deposit interest is calculated on the basis of the individual's income slab rates, which ranges from 5 per cent to 30 per cent. In contrast, the investment income from equity mutual funds is taxed in a range of 12.5 per cent to 20 per cent.

The report proposed a uniform rate of 15 percent on the fixed deposit interest, aligning it with other asset classes, such as mutual funds and direct stocks. This move is expected to simplify the tax structure and promote savings.

Current scenario

With the Budget 2025-26 approaching, let's take a look at fixed deposit interest rates provided by various banks :

SBI FD Rates :

The largest bank of India provides fixed deposit interest rates between 6.75 per cent to 7.5 per cent for the senior citizens, whereas general public are offered interests at 6.25 per cent to 6.5 per cent.

Maturity Period	Senior Citizen (%)	Others (%)
180 days to 210 days	6.75	6.25
211 days to less than 1 year	7	6.5
1 Year to less than 2 years	7.3	6.8
2 years to less than 3 years	7.5	7
3 years to less than 5 years	7.25	6.75
5 years and up to 10 years	7.5	6.5

HDFC Bank FD Rates

HDFC Banks offers fixed deposit interest rates of 6.25 per cent to 7.90 per cent for senior citizens, and 5.75 per cent to 7.40 per cent for general public.

Maturity Period	Senior Citizens (%)	Others (%)
6 months 1 days	6.25	5.75
9 months 1 day to	6.50	6.00
1 year to	7.10	6.60
15 months to	7.60	7.10
18 months to	7.75	7.25
21 months - 2 years	7.50	7.0
2 Years 1 day to	7.50	7.0
2 Years 11 Months - 35 Months	7.85	7.35
2 Years 11 Months 1 day	7.50	7.00
3 Years 1 day to	7.50	7.00
4 Year 7 Months - 55 months	7.90	7.40
4 Year 7 Months 1 day	7.50	7.00
5 Years 1 day - 10 Years	7.5	7

Axis Bank FD Rates

Axis Bank offers fixed deposit interest rates between 6.25 per cent and 7.75 per cent for senior citizens, and between 5.75 per cent and 7.25 per cent for the general public.

Maturity Period	Senior Citizens (%)	Others (%)
6 months	6.25	5.75
7 months	6.25	5.75
8 months	6.25	5.75
9 months	6.5	6
10 months	6.5	6
11 months - 11 months 24 days	6.5	6
11 months 25 days	6.5	6
1 year - 1 year 4 days	7.2	6.7
1 year 5 days - 1 year 10 days	7.2	6.7
1 year 11 days - 1 year 24 days	7.2	6.7
1 year 25 days	7.2	6.7
13 months	7.2	6.7
14 months	7.2	6.7
15 months	7.75	7.25
16 months	7.75	7.25
17 months	7.75	7.25
18 Months	7.75	7.25
2 years	7.6	7.1
30 months	7.6	7.1
3 years	7.6	7.1
5 years to 10 years	7.75	7