Athira Sethu
Kochi, 14 April 2026
Senior citizens aged 60 and above can now earn attractive interest rates on fixed deposits (FDs), with some banks offering rates as high as 8.05% for a five-year term. These FDs allow seniors to grow their savings safely while earning better returns. Tax is deducted at source (TDS) if FD interest exceeds ₹1 lakh per year, but eligible seniors can submit Form 15H to avoid TDS if their total income is below the taxable limit.
FD Interest Rates for Senior Citizens
| Bank Name | FD Interest Rate (%) | Term |
| Suryoday Small Finance Bank | 8.05 | 5 years |
| Jana Small Finance Bank | 7.77 | 5 years |
| Ujjivan Small Finance Bank | 7.70 | 5 years |
| Equitas Small Finance Bank | 7.50 | 5 years |
| Utkarsh Small Finance Bank | 7.50 | 5 years |
| AU Small Finance Bank | 7.25 | 5 years |
| Slice Small Finance Bank | 7.25 | 5 years |
| Shivalik Small Finance Bank | 6.75 | 5 years |
| ESAF Small Finance Bank | 6.25 | 5 years |
Source: paisabazaar.com as of April 8, 2026
Note: FDs in small finance banks are insured up to ₹5 lakh by DICGC. Investors should avoid putting more than the insured limit to reduce risk.
TDS on FD Interest
| Parameter | Details |
| When TDS Applies | If FD interest exceeds ₹1 lakh per year |
| How to Avoid TDS | Submit Form 15H if total income is below the taxable limit |
| Taxable Income Limit (New Regime) | ₹12 lakh |
| Taxable Income Limit (Old Regime) | ₹5 lakh for senior citizens aged 80+, ₹3 lakh for others |
| Refund Option | Any TDS deducted in excess can be claimed via ITR filing |
Tip: Even if income is below taxable limits, banks must deduct TDS on interest above ₹1 lakh. Submitting Form 15H helps seniors avoid this automatic deduction.
