FD Rates: Surpassing even SBI and HDFC, this bank offers 8.6% interest on FDs

Suryoday Small Finance Bank is now offering 8.6% interest to senior citizens on five-year fixed deposits (FDs). In comparison, SBI offers 7.05% and HDFC Bank offers 7.20% interest. Please check the terms and conditions before investing.

For the elderly, keeping their savings secure and generating a regular income after retirement is crucial. In this context, bank fixed deposit (FD) schemes remain a popular investment option. Many banks offer higher interest rates to senior citizens compared to general customers. As of November 2024, some small finance banks are offering an annual interest rate of up to 8.6% on five-year FDs.

Among private sector banks, DCB Bank is offering 8% interest on five-year FDs. Additionally, SBM Bank India and YES Bank offer a rate of 7.50%. Axis Bank provides 7.35% interest to its senior citizen customers, while HDFC Bank offers 7.20% and ICICI Bank offers 7.10% on five-year FDs.

Suryoday Small Finance Bank offers the highest interest

According to the data, Suryoday Small Finance Bank provides the highest interest rate to senior citizens on five-year FDs, offering an annual return of 8.60%. Next is Jana Small Finance Bank, which offers 8% interest on five-year deposits.

Equitas Small Finance Bank and SBM Small Finance Bank offer 7.50% interest to senior citizens, while Utkarsh Small Finance Bank offers an interest rate of 7.40%.

Things to keep in mind before opening an FD

It is not advisable to make an investment in haste simply because a higher interest rate is being offered. Senior citizens should also consider factors such as the bank's reliability, penalties for premature withdrawal of fixed deposits (FDs), and tax-related terms.

Under the DICGC (Deposit Insurance and Credit Guarantee Corporation) scheme, bank deposits are insured up to a maximum of ₹5 lakh per depositor, per bank. This coverage includes both the principal amount and the accrued interest. Furthermore, the interest earned on FDs is subject to taxation; therefore, before investing, one should evaluate the actual (post-tax) returns.

What are the interest rates offered by public sector banks?

Among public sector banks, the State Bank of India (SBI) offers an interest rate of 7.05% to senior citizens on five-year FDs. Bank of Baroda offers 6.90%, while Punjab National Bank (PNB) provides 6.85%. Bank of India and Canara Bank offer an interest rate of 6.75%.