Senior citizens can earn up to 8.05% on five-year FDs

Suryoday Small Finance Bank is offering an 8.05% interest rate on fixed deposits for senior citizens for a five-year term, with deposits up to Rs 3 crore. Jana Small Finance Bank offers 8% on the same tenure, according to data from Paisabazaar as of August 12, 2026. Other small finance banks offer rates ranging from 6.25% to 7.70%.

Senior citizens generally receive an additional 0.50-0.75 percentage point over regular FD rates at many banks, Livemint reports. At 7%, a Rs 1 crore FD can generate about Rs 7 lakh annually before tax, at 8%, the annual income rises to Rs 8 lakh. For a Rs 2 crore FD at 8%, annual interest would be about Rs 16 lakh before tax.

Interest on FDs is taxable. Banks deduct TDS if annual interest exceeds Rs 1 lakh. Senior citizens with total income below Rs 12 lakh (new tax regime) can submit Form 15H to avoid TDS deduction. Experts advise limiting deposits in small finance banks to the DICGC cover of Rs 5 lakh.