Best 5-year FD rates for senior citizens: Earn up to 8.75% interest; full list of banks offering high FD rates

Senior citizens (individuals aged 60 & above) wanting to invest in fixed deposits (FD) for a longer period can book deposits now and lock in the higher rate of interest. There are multiple small finance banks that are offering interest rates of up to 8.75% on fixed deposits maturing in five years. Do note that these interest rates are available on deposits of up to Rs 3 crore.

Here are the best interest rates on five-year FDs offered by small finance banks

Best 5-year FD rates for senior citizens

Suryoday Small Finance Bank's latest senior citizen FD interest rates

Suryoday Small Finance Bank is offering an 8.75% interest rate on its FDs maturing in five years.

Unity Small Finance Bank's latest senior citizen FD interest rates

Unity Small Finance Bank is offering an 8.65% interest rate on its FDs maturing in five years.

Utkarsh Small Finance Bank's latest senior citizen FD interest rate

Utkarsh Small Finance Bank is offering an 8.35% interest rate on its FDs maturing in five years.

Bank	Interest rate
Suryoday Small Finance Bank	8.75%
Unity Small Finance Bank	8.65%
Utkarsh Small Finance Bank	8.35%
AU Small Finance Bank	7.75%
Equitas Small Finance Bank	7.75%
Jana Small Finance Bank	7.75%
Ujjivan Small Finance Bank	7.70%

Source: Paisabazaar.com as of 27 August 2024

AU Small Finance Bank's latest senior citizen FD interest rate

AU Small Finance Bank is offering a 7.75% interest rate on its FDs maturing in five years.

Similarly, Equitas Small Finance Bank is offering an interest rate of 7.75% on its FDs maturing in five years. Moreover, Jana Small Finance Bank is also offering an interest rate of 7.75% on its FD on its FDs maturing in five years.

Ujjivan Small Finance Bank's latest senior citizen FD interest rate

Ujjivan Small Finance Bank is offering an interest rate of 7.7% on its FDs maturing in five years.

What should senior citizens know before investing in bank FDs

Senior citizens can claim a tax deduction of up to Rs 50,000 under section 80 TTB. This deduction applies to interest income earned from various sources including bank FDs. Moreover, this deduction of up to Rs 50,000 is the threshold limit for an aggregate of all the interest income of banks, post offices and deposits held in a banking cooperative society (both savings and FD accounts).

Disclaimer: Owing to their business model, small finance banks cannot be kept on par with other scheduled commercial banks. Hence FDs from small finance banks are also not comparable in terms of risk profile to full-service banks. However, when it comes to insurance, do keep in mind that deposits in small finance banks are also insured by the Deposit Insurance Credit Guarantee Corporation (DICGC) to the tune of Rs 5 lakh. Most of the experts advise layman retail investors to keep their exposure limited in FDs of small finance banks so that it is well within DICGC cover of Rs 5 lakh including principal and interest.