Highest FD interest rates for senior citizens
As the Reserve Bank of India (RBI) has maintained a repo rate at 5.5% in its Monetary Policy Committee (MPC) meeting, banks and Small Finance Banks (SFBs) are unlikely to slash interest rates on their fixed deposit (FD) schemes soon. However, the transmission of previous RBI repo rate cuts into FD interest rates is yet to be over. Amid such a scenario, senior citizens who rely on FD investments for regular income may experience a decrease in their interest income.
However, if they have an existing FD investment, their returns will remain unaffected until maturity since they will get the rates decided at the time of lock-in. But if banks or SFBs slash FD rates, senior citizens may get a low maturity amount. Let us check the highest senior citizen FD interest rates top banks and SFBs are offering.
RBI holds repo rate
On February 6, 2026, the RBI kept the repo rate unchanged at 5.25% under the supervision of RBI Governor Sanjay Malhotra.
Earlier, on December 5, 2025, the RBI cut the repo rate by 25 basis points, bringing it down to 5.25%.
Budget announcement for senior citizen FDs
Budget 2026 did not propose any major changes for senior citizens that can impact their FD investments.
Also read: FD investors breathe easy as RBI pauses rates; how to lock in your investments for better return
FD interest rates of top banks and SFBs
Utkarsh Small Finance Bank is offering an 8% interest rate on its three-year FD to senior citizens. Jana Small Finance Bank is offering an 8% interest rate on its 2-3 year senior citizen FDs.
Yes Bank offers a 7.75% FD interest rate on tenures of 36 months to less than 60 months. ICICI Bank offers its highest FD interest rate at 7.1% on tenures ranging from 3 years and 1 day to 10 years. Canara Bank offers its highest FD interest rate at 7% on a 555-day tenure. HDFC Bank is offering its highest FD interest rate of 6.95% on tenures of 21 months to 2 years and 11 months.
When is TDS deducted on the return of an FD?
Banks are required to deduct tax deducted at source (TDS) if the interest on a senior citizen fixed deposit (FD) crosses Rs 1 lakh in a specific bank. Remember, TDS isn’t an additional tax; you can get it back as refund or offset it against your total tax liability when you file your income tax return (ITR).
Submit Form 15H
Senior citizens earning interest on FD deposits and seeking to avoid Tax Deducted at Source (TDS), can claim an exemption from TDS by filling Form 15H, as long as they meet eligibility requirements.
They need to submit Form 15H every financial year to prevent TDS on eligible deposits. If you missed submitting Form 15G/H, TDS will be deducted. However, you can claim a refund while filing your Income Tax Return (ITR) depending on eligibility.
RBI holds repo rate
On February 6, 2026, the RBI kept the repo rate unchanged at 5.25% under the supervision of RBI Governor Sanjay Malhotra.
Budget announcement for senior citizen FDs
Budget 2026 did not propose any major changes for senior citizens that can impact their FD investments.
Also read: FD investors breathe easy as RBI pauses rates; how to lock in your investments for better return
FD interest rates of top banks and SFBs
Yes Bank offers a 7.75% FD interest rate on tenures of 36 months to less than 60 months. ICICI Bank offers its highest FD interest rate at 7.1% on tenures ranging from 3 years and 1 day to 10 years. Canara Bank offers its highest FD interest rate at 7% on a 555-day tenure. HDFC Bank is offering its highest FD interest rate of 6.95% on tenures of 21 months to 2 years and 11 months.
When is TDS deducted on the return of an FD?
Banks are required to deduct tax deducted at source (TDS) if the interest on a senior citizen fixed deposit (FD) crosses Rs 1 lakh in a specific bank. Remember, TDS isn’t an additional tax; you can get it back as refund or offset it against your total tax liability when you file your income tax return (ITR).
Submit Form 15H
They need to submit Form 15H every financial year to prevent TDS on eligible deposits. If you missed submitting Form 15G/H, TDS will be deducted. However, you can claim a refund while filing your Income Tax Return (ITR) depending on eligibility.
Next Story