Best Senior Citizen FD Rates: Which Bank Offers the Highest Returns?

October 27, 2024 By: Nisha Chawla

Fixed Deposits (FDs) are a trusted investment option, especially for senior citizens, who prioritize stable returns with minimal risk. Many banks offer higher interest rates on FDs for individuals aged 60 and above. These FDs ensure guaranteed returns and help seniors grow their savings without worrying about market volatility.

Banks typically provide an extra 0.50% to 0.75% interest to senior citizens compared to the general public. Let’s explore the best FD schemes available, benefits offered, and which banks are giving the highest returns.

What Makes Senior Citizen FDs Popular?

Senior citizens often prefer FDs for their safety, steady returns, and government insurance coverage through DICGC (Deposit Insurance and Credit Guarantee Corporation). This insurance protects deposits (including FDs, savings, and RDs) up to ₹5 lakh per account holder, even if the bank faces financial difficulties.

FDs offer a hassle-free way for senior citizens to invest and earn predictable interest. With additional features like loans against FD and premature withdrawal options, these schemes provide both liquidity and security.

Top Benefits of Senior Citizen FDs

1. Higher Interest Rates
   Banks offer senior citizens better interest rates—usually 0.50% to 0.75% higher than standard rates—ensuring better returns over time.
2. Loan Against FD
   Seniors can avail of loans by using their FD as collateral. This is a great option in emergencies, as the FD remains intact while the loan is repaid within a fixed term.
3. Premature Withdrawal Option
   Although FD investments are ideally held until maturity, many banks allow early withdrawals with a nominal penalty. This helps seniors meet urgent financial needs without incurring significant losses.
4. TDS Waiver with Form 15H
   Senior citizens can avoid TDS (Tax Deducted at Source) on their FD and RD interest by submitting Form 15H. This self-declaration ensures no tax is deducted at the source if the total income is below the taxable limit.

Top Banks Offering the Best FD Rates for Senior Citizens

Here is a list of banks with the highest interest rates on senior citizen FDs across different tenures. These rates are effective as of October 23, 2024.

Small Finance Banks Offering High FD Returns

Bank Name	1 Year FD (%)	3 Year FD (%)	5 Year FD (%)	Max Interest & Tenure
AU Small Finance Bank	7.75	8.00	7.75	8.50% (18 months)
Equitas Small Finance Bank	8.60	8.50	7.75	8.75% (444 days)
ESAF Small Finance Bank	6.50	7.25	6.75	8.75% (2-3 years)
Jana Small Finance Bank	8.75	8.75	7.75	8.75% (1-3 years)
NorthEast Small Finance Bank	7.50	9.50	6.75	9.50% (546-1111 days)
Suryoday Small Finance Bank	7.35	9.10	8.75	9.10% (2-3 years)
Unity Small Finance Bank	8.35	8.65	8.65	9.50% (1001 days)
Utkarsh Small Finance Bank	8.60	9.10	8.35	9.10% (2-3 years)

Private Banks with Competitive FD Rates

Bank Name	1 Year FD (%)	3 Year FD (%)	5 Year FD (%)	Max Interest & Tenure
Axis Bank	7.20	7.60	7.75	7.75% (15 months)
Bandhan Bank	8.55	7.75	6.60	8.55% (1 year)
DCB Bank	7.60	8.05	7.90	8.55% (19-20 months)
IndusInd Bank	8.25	7.75	7.75	8.25% (1-2 years)
RBL Bank	8.00	8.00	7.60	8.60% (500 days)
Yes Bank	7.75	8.00	8.00	8.50% (18 months)

Government Banks with Reliable FD Schemes

Bank Name	1 Year FD (%)	3 Year FD (%)	5 Year FD (%)	Additional Benefits
State Bank of India	7.30	7.25	7.50	0.30% bonus for tenures up to 5 years
Bank of Baroda	7.35	7.65	7.40	Special “Utsav” scheme
Canara Bank	7.35	7.30	7.20	0.10% extra on select tenures
Punjab National Bank	7.30	7.50	7.00	0.30% bonus on long-term FDs
Union Bank of India	7.30	7.20	7.00	0.25% on all tenures

Things to Consider Before Investing in Senior Citizen FDs

1. Compare Interest Rates Regularly: Banks frequently change their FD rates, so it’s crucial to compare current offers to get the best deal.
2. Choose the Right Tenure: Selecting the right FD tenure ensures you get the best return while aligning with your financial goals.
3. Check Premature Withdrawal Penalties: Always review the bank’s penalty terms for early withdrawal to avoid surprises in case of emergencies.
4. Submit Form 15H: Avoid TDS by submitting Form 15H if your total income is below the taxable limit.

With banks offering better FD rates in 2024, now is a good time for senior citizens to lock in their savings and enjoy stable returns.