For senior citizens seeking safe investment options, bank fixed deposits (FDs) can be an attractive choice, with some small finance banks offering interest rates up to 9.1% for a three-year tenure. These rates are applicable for FDs below Rs 3 crore and are particularly notable given that many banks are currently reducing their FD interest rates. The banks offering the highest interest rates for senior citizens include:
– Utkarsh Small Finance Bank at 9.1%
– Northeast Small Finance Bank at 9%
– Jana Small Finance Bank and Suryaodaya Small Finance Bank at 8.75%
– Unity Small Finance Bank at 8.65%
– Equitas Small Finance Bank at 8.25%
This presents a good opportunity for investment, especially considering the Reserve Bank of India’s (RBI) decision to cut the repo rate and the subsequent reduction in FD interest rates by major banks. However, it’s essential to exercise caution when investing in small finance banks. While deposits up to Rs 5 lakh are insured under the Deposit Insurance Credit Guarantee Corporation (DICGC), keeping investments within this limit ensures that your money can be returned in case of unforeseen events.
Moreover, senior citizens can avoid Tax Deducted at Source (TDS) on their FDs by submitting Form 15H if their total tax liability is zero. This form is valid as long as the taxpayer’s liability remains zero after all deductions, regardless of the total income exceeding Rs 3 lakh. As of the latest update on April 23, 2025, these rates and conditions offer senior citizens a chance to secure good returns safely for the next three years. It’s advisable to review the terms and conditions and consider financial advisors’ inputs before making any investment decisions.