For senior citizens seeking secure investment options with high returns, fixed deposits (FDs) offered by small finance banks are an attractive choice. As of August 2025, six small finance banks in India are providing FD interest rates above 8% for a 3-year tenure, specifically designed for individuals aged 60 and above. These banks include Utkarsh Small Finance Bank, Slice Small Finance Bank, Shivalik Small Finance Bank, Fincare Small Finance Bank, Suryoday Small Finance Bank, and Jana Small Finance Bank.
Utkarsh Small Finance Bank offers 8.15% interest on 3-year FDs for senior citizens, with a special benefit of 0.60% extra over the general rate. Slice Small Finance Bank currently offers the highest FD rate at 8.25% for senior citizens on a 3-year deposit. Shivalik Small Finance Bank, Fincare Small Finance Bank, and Jana Small Finance Bank offer 8.00% interest to senior citizens for a 3-year FD, while Suryoday Small Finance Bank provides a solid 8.15% interest rate.
These small finance banks offer flexible tenures ranging from 7 days to 10 years, with a minimum deposit requirement of Rs 1,000. However, premature withdrawals attract penalties, which vary from bank to bank. It is essential for senior citizens to consider factors like tenure, premature withdrawal penalties, and bank credibility before investing in these FDs.
The key benefits of these FDs include steady income, higher rates than traditional banks, and digital-first convenience. Senior citizens can choose the bank that aligns best with their financial goals, considering the interest rates, tenure options, and penalties. By comparing features and selecting the most suitable option, senior citizens can securely grow their savings and enjoy attractive returns on their investments.