Up to 8.6% Interest on FDs: Get Bumper Returns from These Major Banks

Banks are offering up to 8.6% interest on fixed deposits (FDs) to senior citizens. Ujjivan, Equitas, and ESAF Small Finance Banks are among those providing these rates. Before investing, be sure to understand the tenure, withdrawal terms, and the ₹5 lakh insurance cover provided by the DICGC.

Maintaining a regular income after retirement is one of the most critical financial needs for the elderly. In this context, fixed deposits (FDs) remain a popular investment choice, as they offer a pre-determined rate of interest.

As of October 2026, some banks are offering up to 8.6% interest on FDs for senior citizens. However, alongside the higher interest rates, it is essential to consider factors such as the bank's safety, the investment tenure, and the terms and conditions for withdrawals.

Which Private Bank Offers the Best Deal?

Among private sector banks, DCB Bank is offering up to 8% interest to senior citizens on FDs with a tenure of 60 to 61 months. Bandhan Bank offers 7.95% interest on deposits with a tenure ranging from 2 years to less than 3 years. Meanwhile, SBM Bank India provides a maximum interest rate of 7.8%. IndusInd Bank and YES Bank also offer up to 7.75% interest on select tenures.

Small Finance Banks Offer the Highest Interest Rates

According to data as of October 28, 2026, Small Finance Banks are leading in terms of offering the highest FD interest rates for senior citizens. Ujjivan Small Finance Bank tops the list, offering a maximum annual interest rate of 8.6% on FDs with tenures ranging from 3 years and 1 day to 3 years and 6 months.

Additionally, Equitas Small Finance Bank and ESAF Small Finance Bank are offering a maximum interest rate of 8.5%. At Equitas, this rate is available for a tenure of 3 years and 1 day, while at ESAF, it is offered for a tenure of 26 months and 8 days. Suryoday Small Finance Bank is also offering 8.5% interest on 5-year fixed deposits (FDs). Meanwhile, Jana Small Finance Bank provides a maximum interest rate of 8.3% on 3-year deposits.

Understand the safety rules before opening an FD

Higher interest rates do not mean you should invest your entire savings into any bank without proper due diligence. According to the rules of the Deposit Insurance and Credit Guarantee Corporation (DICGC), deposits in a bank are insured up to a maximum of ₹5 lakh. This coverage includes both the principal amount and the accrued interest. This limit is calculated by aggregating the total deposits held across all branches of the same bank. Separate insurance coverage applies to deposits held in different banks.

Points to consider before investing

When choosing an FD, senior citizens should not base their decision solely on the interest rate. It is essential to first consider the required tenure for the deposit and the penalty applicable for premature withdrawal, should the need arise. Additionally, one should compare options for receiving interest—whether on a monthly or quarterly basis, or upon maturity.

For those—especially retirees—whose expenses depend on the interest earned from FDs, selecting the right tenure and a suitable payout frequency is crucial. Banks may also revise their interest rates from time to time; therefore, always verify the current rates and terms and conditions on the respective bank's official website before investing.

What interest rates are offered by public sector banks?

Public sector banks also offer attractive FD options for senior citizens. According to available data, Bank of India leads among public sector banks, offering senior citizens a maximum annual interest rate of 7.45% on FDs for select tenures. However, this rate is lower compared to small finance banks.