Up to 8% Interest on FDs for Senior Citizens: Find Out Which Banks Offer This Opportunity..

If you are aged 60 or above and are looking for a secure investment avenue, Fixed Deposits (FDs) remain a robust option. Notably, some banks are currently offering interest rates of up to 8% on 3-year FDs for senior citizens. However, these rates typically apply to investments up to a maximum limit of ₹3 crore.

Who is Offering the Highest Interest Rates?
Utkarsh Small Finance Bank and Jana Small Finance Bank are offering interest rates of up to 8% on 3-year FDs for senior citizens. These currently rank among the options offering the highest returns in the market.

Other Options Offering 7.5% to 7.7%
If you prefer slightly lower but stable returns, Ujjivan Small Finance Bank is offering an interest rate of 7.7%. Additionally, AU Small Finance Bank (7.6%), Equitas Small Finance Bank (7.5%), and Slice Small Finance Bank (7.5%) are also excellent choices.

When is TDS Deducted?
If the annual interest earned by a senior citizen from an FD exceeds ₹1 lakh, banks deduct Tax Deducted at Source (TDS). However, this does not constitute an additional tax liability. You can adjust this amount while filing your Income Tax Return (ITR) or claim it back as a refund.

An Easy Way to Save on Taxes
If your total income falls outside the taxable bracket, you can avoid TDS deductions by submitting Form 15H. Under the new tax regime, income up to ₹12 lakh is exempt from tax; therefore, senior citizens whose income falls within this limit can avail themselves of this facility.

Points to Consider Before Investing
Even if your income is tax-exempt, banks are mandated by regulations to deduct TDS if the interest earned exceeds ₹1 lakh. In such instances, it is crucial to submit Form 15H on time to avoid unnecessary deductions. For senior citizens, FDs continue to be a safe and attractive investment option, particularly given that interest rates are currently reaching up to 8%.

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