FD rate up to 8.5% for senior citizens investing for three years; Know the list of banks

There are still some banks which continue to offer up to 8.5% interest rate on fixed deposits (FDs) made by senior citizens (age 60 years and above) for a three- year term with a maximum limit of Rs 3 crore.

Read below to know the list of banks offering FD interest rates up to 8.5%.

Bank FD interest rate for senior citizens

FD rate up to 8.5%

Utkarsh Small Finance Bank is offering 8.5% interest rate on FD of three year tenure.

FD rate up to 8.25% for senior citizens

Jana Small Finance Bank is offering 8.25% interest rate on FD for three year tenure for senior citizens.

slice Small Finance Bank is offering 8.25% interest rate on FD for three year tenure for senior citizens.

Bank name	Interest rate
Utkarsh Small Finance Bank	8.5%
Jana Small Finance Bank	8.25%
slice Small Finance Bank	8.25%
Suryoday Small Finance Bank	8.15%

Source: Paisabazaar.com as of July 16, 2025

FD rate up to 8.15%

Suryoday Small Finance Bank is offering up to 8.15% interest rate on FD for three year tenure.

Disclaimer: While deposits in small finance banks are insured by the Deposit Insurance Credit Guarantee Corporation (DICGC) up to Rs 5 lakh, experts advise investors to exercise caution when investing in their FDs. Given their unique business model, the risk associated with investing in small finance bank FDs might differ slightly from that of scheduled commercial banks. To mitigate potential risks, it's recommended that investors limit their exposure to small finance bank FDs to an amount that falls within the DICGC coverage. This ensures that their principal and interest are protected in unforeseen circumstances.

When is TDS deducted from bank FDs?

Banks are required to deduct tax deducted at source (TDS) if the interest earned on a fixed deposit (FD) exceeds Rs 1 lakh in a particular bank. Keep in mind that TDS isn’t an extra tax; you can reclaim it as a refund or offset it against your total tax liability when you file your income tax return (ITR). Moreover, if you are eligible for a tax refund, you might also qualify for interest on that refund.

For instance, if a senior citizen has an income is Rs 11 lakh, they won’t have to pay income tax thanks to the Section 87A tax rebate under the new tax regime for FY 2025-26. The Section 87A tax rebate is applies to income up to Rs 12 lakh under the new tax regime.

Additionally, a senior citizen can submit Form 15H to avoid TDS deduction if his total income, after claiming all deductions and the Section 87A rebate is below the taxable limit, which is Rs 12 lakh for the new tax regime or Rs 5 lakh for the old one.

Also read: To prevent TDS on FD under new tax regime can senior citizens with income up to Rs 12 lakh file Form 15H?

Even though no income tax is charged on income below Rs 12 lakh, banks and other financial institutions will still deduct TDS. This is because the law requires them to deduct TDS once the interest/income amount surpasses a certain limit, which is Rs 1 lakh for senior citizens. Banks are not aware of individual tax liabilities and will deduct TDS whenever the annual interest exceeds Rs 1 lakh. Hence submit Form 15H to let the banks know.