Senior citizens are getting 8.50% interest on FDs! Find out the returns on 3-year and 5-year FDs of ₹5 lakh to ₹10 lakh...
Senior Citizen FD Returns: Fixed Deposits (FDs) are a preferred avenue for safe and regular income among senior citizens. Currently, Small Finance Banks (SFBs) are offering interest rates of up to 8.50% to senior citizens. Meanwhile, private banks are offering up to 8.00%, public sector banks up to 7.45%, and foreign banks up to 7.10%.
Here is a detailed breakdown of the interest a senior citizen would earn on an FD of ₹5 lakh or ₹10 lakh over tenures of 3 and 5 years at these varying rates.
How much will be earned on a ₹5 lakh FD over 3 and 5 years?
How much will be earned on a ₹10 lakh FD over 3 and 5 years?
The significant benefit of compounding: If you invest ₹10 lakh in an FD for 5 years at an interest rate of 8.50%, you will earn over ₹5.22 lakh in interest alone. In other words, your money will grow to more than 1.5 times its original value in 5 years. Compared to SBI (7.05%), investing in a top Small Finance Bank would result in an additional earning of ₹1,03,330 over the 5-year period. Bank Interest Rates by Category
1. Small Finance Banks:
Equitas Small Finance Bank: 8.50%
ESAF Small Finance Bank: 8.50%
Suryoday Small Finance Bank: 8.50%
Jana Small Finance Bank: 8.30%
Ujjivan Small Finance Bank: 8.30%
Utkarsh Small Finance Bank: 8.25%
Shivalik Small Finance Bank: 8.25%
2. Private Banks:
DCB Bank: 8.00%
Bandhan Bank: 7.95%
IndusInd Bank: 7.75%
YES Bank: 7.75%
IDFC FIRST Bank: 7.35%
Kotak Mahindra Bank: 7.15%
HDFC Bank / ICICI Bank: 7.10%
3. Public Sector Banks:
Bank of India: 7.45%
Bank of Baroda / Central Bank of India: 7.25%
Indian Bank: 7.15%
Canara Bank / IOB / PNB: 7.10%
State Bank of India (SBI) / Union Bank: 7.05%
3 Important Points for Senior Citizens Before Investing
₹5 Lakh Insurance Cover (DICGC Rule): Under the DICGC (an RBI subsidiary), a customer's deposits—comprising both principal and interest—are insured up to a maximum of ₹5 lakh per bank. Therefore, if you are investing ₹10 lakh, it is safer to split the amount and deposit ₹5 lakh each in two different banks rather than keeping the entire sum in a single bank. Tax Deduction (TDS Rule): Senior citizens are eligible for a tax exemption under Section 80TTB on interest income of up to ₹50,000 earned from Fixed Deposits (FDs) in a financial year. If your total interest income exceeds ₹50,000 but your overall income falls below the taxable threshold, submit Form 15H to the bank to avoid TDS deduction.
Check Special Tenures: Banks often offer their highest interest rates (e.g., 8.50%) only for specific tenures (such as 666 days, 800 days, or 3 years). Before booking a deposit, be sure to check which tenure offers the highest rate at the respective bank.
