Good News for Senior Citizens! Up to 8.05% Interest Available on 5-Year FDs..

Amidst rising inflation and market volatility, Fixed Deposits (FDs) remain the most reliable investment option for senior citizens today. Notably, some Small Finance Banks are currently offering interest rates of up to 8.05% on 5-year FDs for elderly investors. These rates apply to individuals aged 60 years and above.

**The Bank Offering the Highest Interest Rates**
Currently, Suryoday Small Finance Bank is offering the highest interest rate to senior citizens on 5-year FDs, at 8.05%. Meanwhile, Jana Small Finance Bank is offering up to 7.77%, and Ujjivan Small Finance Bank is offering up to 7.70%.

Additionally, Equitas Small Finance Bank and Utkarsh Small Finance Bank are providing returns of up to 7.50%. Compared to major banks, Small Finance Banks are offering higher interest rates to attract customers.

**Why Are Small Banks Offering Higher Returns?**
According to Saurabh Jain, Co-founder of Stable Money, Small Finance Banks are offering attractive interest rates to boost their retail deposits. He noted that banks such as Utkarsh, Suryoday, and Shivalik have maintained stability in their FD rates for a considerable period, which has bolstered investor confidence.

**Caution is Essential Before Investing**
Experts advise that it is not prudent to invest solely based on high interest rates. When investing in Small Finance Banks, it is equally important to prioritize security. However, all bank FDs are covered by deposit insurance of up to ₹5 lakh, provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC).

Therefore, it is recommended that FD investments in Small Finance Banks be kept within the ₹5 lakh limit to ensure the safety of the funds in the event of any unforeseen circumstances.

**Understand the TDS Rules on FDs**
If the annual interest earned from an FD in any bank exceeds ₹1 lakh, the bank will deduct TDS (Tax Deducted at Source). However, under the new tax regime for the Financial Year 2025-26, income up to ₹12 lakh is exempt from income tax. In such a situation, senior citizens can avoid TDS deduction by submitting Form 15H.

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.