If you are a senior citizen and want to invest your savings in safe investment options and earn more than 8% annual returns, some banks in the country are still offering interest rates of up to 8.10% on 5-year senior citizen FDs. These attractive interest rates are primarily offered by small finance banks, which are leading the way in providing better returns on long-term FDs.
Suryoday Small Finance Bank
Currently, Suryoday Small Finance Bank offers senior citizens up to 8.10% interest on 5-year FDs. Similarly, Jana Small Finance Bank offers 8% interest, and Utkarsh Small Finance Bank offers 7.75% interest. These rates apply to deposits up to ₹3 crore, and TDS will be deducted under normal income tax rules. In addition to small finance banks, several private sector banks and public sector banks also offer good rates for senior citizens.
For example, among private banks, YES Bank and SBM Bank India offer 7.5% interest, while Axis Bank offers 7.35%, RBL Bank 7.2%, and IndusInd Bank 7.15%. Larger banks like HDFC Bank (6.9%) and ICICI Bank (7.1%) have slightly lower rates.
Public Sector Banks
Among public sector banks, State Bank of India (SBI) offers senior citizens 7.05% interest on 5-year FDs, the highest among public sector banks. Bank of Baroda offers 7%, while Canara Bank, Central Bank of India, and Punjab National Bank offer 6.75%. Indian Bank offers 6.5%. However, experts advise caution when investing in small finance banks. While DICGC insurance is available on deposits with these banks, it’s limited to deposits up to ₹5 lakh. This means that if the bank faces any unexpected problems, the amount up to ₹5 lakh will be protected. Therefore, it’s best to keep your small finance bank FD investments within this limit to ensure both capital and interest are protected.
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