Senior Citizens: Earn Up to 8.05% on 5-Year FDs by Aug 2026
By ThePip Desk
Senior citizens can earn up to 8.05% on 5-year FDs by August 2026. Explore top bank rates and understand crucial TDS rules, including Form 15H.
If you’re a senior citizen looking for stable returns on your savings, fixed deposits (FDs) remain a strong choice. By August 2026, some banks are offering an attractive interest rate of up to 8.05% on 5-year FDs.
Key FD Rates for Senior Citizens
- Maximum interest rate: 8.05% on 5-year FDs.
- This applies to deposits up to Rs 3 crore.
- Eligibility: Individuals aged 60 and above.
Several small finance banks are leading the way with these competitive rates. Suryoday Small Finance Bank offers the highest at 8.05% for 5-year FDs.
Top Small Finance Bank FD Rates (August 2026)
- Jana Small Finance Bank: 8.00%
- Ujjivan Small Finance Bank: 7.70%
- Equitas Small Finance Bank: 7.50%
- Utkarsh Small Finance Bank: 7.50%
- AU Small Finance Bank: 7.25%
- Slice Small Finance Bank: 7.25%
- Shivalik Small Finance Bank: 6.75%
- ESAF Small Finance Bank: 6.25%
Beyond attractive interest, it’s also crucial to understand how taxes affect your FD earnings. Tax Deducted at Source (TDS) applies to your FD interest, but it’s not an extra tax.
Understanding TDS on Your FD Interest
- TDS is applicable if your interest earnings exceed Rs 1 lakh in a financial year.
- This deducted amount can be claimed as a refund or adjusted against your total tax liability when you file your income tax returns.
- To avoid TDS, you can submit Form 15H to your bank.
- You can use Form 15H if your total income, after all exemptions and Section 87A deductions, stays below the taxable limit.
The taxable income limits vary depending on the tax regime you choose. Under the new tax regime for FY26, this limit stands at Rs 12 lakh.
For those opting for the old regime, the limit was Rs 5 lakh, or Rs 3 lakh for individuals under 80. Banks will still deduct TDS if your interest crosses the Rs 1 lakh threshold, even if your overall income is lower, as they don’t know your full tax situation.
Knowing these details helps you manage your FD investments and tax obligations effectively. Always keep track of your interest income to plan your tax strategy.