Bumper interest on FD for senior citizens! If you are a senior citizen and want to invest in FD, this may be the right time for you. Some banks are still offering interest rates up to 9.1%, but due to RBI’s repo rate cut, interest rates may change in the future.
Bumper interest on FD for senior citizens! This is a great opportunity for senior investors, as some banks are still offering up to 9.1 per cent interest on 5-year FDs. However, some banks have recently started cutting interest rates, as the Reserve Bank of India (RBI) reduced the repo rate by 25 basis points (BPS) on February 7, 2025. Let us know which banks are still offering these attractive interest rates.
Which banks are giving the highest interest?
9.1% interest rate
Suryoday Small Finance Bank is offering 9.1% interest on 5-year FDs to senior citizens. This is one of the highest interest rates offered by any bank currently.
8.65% interest rate
Unity Small Finance Bank is offering 8.65% interest rate to senior citizens on its 5-year tenure FD.
8.5% interest rate
Northeast Small Finance Bank is offering an interest rate of 8.5% on 5-year FD to senior investors.
8.35% interest rate
Utkarsh Small Finance Bank is offering 8.35% interest to senior citizens on 5-year fixed deposits.
8.2% interest rate
Jana Small Finance Bank is offering 8.2% interest on 5-year FD to senior citizens.
Tax saving benefit on 5 year FD
Under the old tax regime, senior citizens get tax exemption of up to Rs 1.5 lakh under section 80C by investing in 5-year FD. However, investors adopting the new tax regime will not get this exemption.
Apart from this, senior citizens can avail exemption on interest income up to Rs 50,000 every financial year under section 80TTB. However, tax will be payable on the maturity amount of the FD as per the tax slab.
Caution is necessary before investing in small finance banks
Deposits in small finance banks are insured up to Rs 5 lakh by the Deposit Insurance Credit Guarantee Corporation (DICGC). However, experts advise that investors should limit their investments keeping in mind the risks involved. The business model of these banks is different from traditional banks, which may lead to a different level of risk.
