Fixed deposits
Senior citizen FD: how much extra interest do you really get?
Most banks pay senior citizens (60 and above) about 0.50% more on fixed deposits. On ₹10 lakh for 5 years, that extra half a percent earns roughly ₹34,000 more in interest.
What banks are offering (October 2026)
| Bank type | Typical highest senior rate |
|---|---|
| HDFC Bank, ICICI Bank | 7.10% |
| IndusInd Bank, YES Bank | 7.75% |
| Bank of India | 7.45% |
| Small finance banks (Equitas, ESAF, Suryoday) | up to 8.50% |
The highest rate usually applies to one specific tenure, such as 3 or 5 years. Rates change often, so check the bank's website before you invest. Source: Upstox, October 2026.
₹10 lakh for 5 years at different rates
| FD rate | Interest earned | Maturity amount |
|---|---|---|
| 6.40% (regular) | ₹3,73,644 | ₹13,73,644 |
| 6.90% (senior, +0.5%) | ₹4,07,842 | ₹14,07,842 |
| 7.50% | ₹4,49,948 | ₹14,49,948 |
| 8.50% | ₹5,22,795 | ₹15,22,795 |
All figures assume interest is compounded quarterly and paid at maturity. Moving from a large bank to a small finance bank at 8.5% could earn over ₹1 lakh more on the same deposit.
Are small finance banks safe?
They are regulated by the RBI, and deposits up to ₹5 lakh per person per bank are insured by DICGC. Many seniors keep up to ₹5 lakh in each small finance bank and the rest in large banks.
Tax rules for senior citizens
- Banks deduct TDS only when FD interest crosses ₹1 lakh a year for seniors.
- If your total income is below the taxable limit, submit Form 15H to the bank to avoid TDS.
- Under the old regime, seniors can deduct up to ₹50,000 of bank interest a year.
If you need monthly income, choose the monthly payout option. The rate is slightly lower than the cumulative option, because interest isn't compounded.
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