There are still some small finance banks offering interest rates of up to 8.4% on fixed deposits (FDs) for senior citizens (aged 60 and above) for deposits of up to 3 crore rupees.
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FD interest rates: Several banks have reduced their fixed deposit (FD) interest rates in the last few months. These rates have been lowered for both general customers and senior citizens. However, some small finance banks are still offering interest rates of up to 8.4% on fixed deposits (FDs) for senior citizens (aged 60 and above) for deposits up to a maximum of ₹3 crore.
Fixed deposits are an attractive option for senior citizens looking for a source of regular income. Here’s a look at some small finance banks offering FD rates of over 8% as of September 2025.
Bank FD Interest Rates for Senior Citizens
Suryaodaya Small Finance Bank
Suryaodaya Small Finance Bank offers an interest rate of 8.4% on 5-year fixed deposits. These rates are effective from September 8, 2025.
Utkarsh Small Finance Bank
Utkarsh Small Finance Bank offers an interest rate of 8.15% on fixed deposits of 2 to 3 years. These rates will be effective from July 25, 2025.
Jan Small Finance Bank
Jan Small Finance Bank is offering an interest rate of 8% on fixed deposits of 2 to 3 years and 5 years. These rates are effective from September 16, 2025.
Shivalik Small Finance Bank
Shivalik Small Finance Bank offers an interest rate of 7.8% on fixed deposits of 18 to 24 months. These rates are effective from September 18, 2025.
TDS exemption for senior citizens
Banks deduct TDS at a rate of 10% on interest earned from fixed deposits. For individuals under 60 years of age, TDS is applicable if the total FD interest earned in a financial year exceeds ₹50,000. For senior citizens (60 years and above), this limit is ₹1 lakh per year. If the interest income remains within this limit, no TDS is deducted.
