Best senior citizen FDs in October: 12 banks offer up to 8.15% interest

Senior citizens earn the highest FD returns from small finance banks, with rates up to 8.15%, while new TDS limits apply from Budget 2025

Before locking money in a fixed deposit, investors should first compare interest rates across banks, as returns vary widely depending on the institution and tenure. In most cases, banks offer better returns for longer durations and provide additional interest to senior citizens.

 

Small finance banks offer highest FD rates

 

Small finance banks continue to offer the most attractive FD rates for senior citizens.

• ESAF Small Finance Bank offers 8.10% for 444 days.

• Jana Small Finance Bank offers 8.00% for deposits above 2 years to 3 years, and also for 5 years.

• Suryoday Small Finance Bank offers 8.10% for 5 years.

 

• Utkarsh Small Finance Bank offers 8.15% for deposits between 2 and 3 years.

 

Private sector banks follow closely

 

Among private sector lenders, rates are slightly lower but remain competitive.

• Bandhan Bank offers 7.70% for 2 years to less than 3 years.

• DCB Bank offers 7.70% for 37–38 months, with an additional 0.05% for depositors aged 70 and above.

• RBL Bank offers 7.70% for 18 months to 3 years, and super senior citizens earn an extra 0.25%.

• YES Bank offers 7.75% for deposits from 3 years to less than 5 years.

 

Public sector banks offer moderate returns

 

Public sector banks continue to offer slightly lower returns than smaller banks.

• Bank of Maharashtra offers 7.20% for 366 days.

• Central Bank of India offers 7.25% for 2222 or 3333 days.

• Indian Bank offers 7.20% for 444 days, with an extra 0.25% for super senior citizens.

• Indian Overseas Bank also offers 7.20% for 444 days, plus 0.25% for those aged 80 and above.

 

Super senior citizens, depositors aged 80 years and above, get slightly higher rates at most banks. 

 

Note: Data is as of October 22, 2025, according to Paisabazaar.com.

 

Tax rules on FD interest

 

"Interest earned on fixed deposits is taxable, and banks deduct tax at source (TDS) once the annual interest crosses a threshold. Budget 2025 raised these limits to ₹50,000 for general citizens (earlier ₹40,000) and ₹1 lakh for senior citizens," said Adhil Shetty, CEO, BankBazaar.com.

 

For instance:

 

Consider Pankaj, a 28-year-old from Delhi, who earns ₹75,000 in annual interest from fixed deposits.

• The taxable portion is ₹25,000, as the TDS limit is ₹50,000.

• A 10% tax applies to the excess, so ₹2,500 is deducted.

• The ₹75,000 interest is added to his total income, but if it remains below ₹2.5 lakh, no further tax applies.

• By submitting Form 15G at the start of the financial year, he can avoid TDS if his income falls below the taxable limit.

 

The comparison suggests that senior citizens benefit most by placing longer-term deposits with small finance banks, while tax compliance through Form 15G or 15H can help avoid unnecessary deductions.