Senior citizens can now lock 8.5% FD returns as RBI hits pause in August

The Reserve Bank of India (RBI) kept the repo rate unchanged on August 6, maintaining a cautious stance to control inflation. While this means FD interest rates in most banks are likely to stay stable, senior citizens still have plenty of high-return options to make the most of their savings.

 

In today’s landscape, senior citizens can earn up to 8.5% per annum on fixed deposits, especially with small finance banks offering the best deals.

 

 Best FD Rates for Senior Citizens (as of August 6, 2025) 

Data compiled by Paisabazaar on 6 August, 2025

 

(Note: All above rates are for senior citizens aged 60+. Super senior citizens (80+) may get an additional 0.10–0.30% in some banks.)   

Most banks have already cut their FD rates in response to previous repo rate cuts.

 

“For depositors, a 50 bps repo rate cut may not slash FD rates overnight, but it does signal the beginning of a downward trend,” said Adhil Shetty, CEO of BankBazaar.com. 

 

 What Should Senior Citizens Do Now?

With interest rates plateauing, this is a good time to lock into longer tenure FDs if you're a retiree or approaching retirement. Opt for tenures between 1–3 years to strike a balance between high returns and flexibility. 

“If you’re a conservative investor looking for safety and predictability, consider locking your money in current long-term FD rates before they dip further. Some banks are still offering between 7 per cent and 7.5 per cent for 2–5-year tenures. Senior citizens get an additional 0.25 per cent to 0.5 per cent,” said Shetty.

 

Also, consider splitting deposits across banks to stay within insurance limits (₹5 lakh per bank) and diversify risk.

 

Things to Watch Out For:

Always check whether the bank is covered under DICGC insurance (most scheduled banks are).

 

Compare effective returns post-tax, especially if you fall into a higher tax bracket.

 

For super senior citizens (80+), explore banks that offer extra benefits—up to 0.30% more. 

Best rates for Senior Citizens right now