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Senior Citizen FD Interest Rate: Amidst rising inflation and global uncertainties, if there's one thing that's most needed, it's a stable and reliable income. Especially for senior citizens, who rely on a fixed monthly income after retirement. In such a situation, fixed deposits (FDs) remain a preferred and safe investment option.

Although many major banks have reduced FD interest rates in the past few months, there are still some public, private, and small finance banks that offer senior citizens interest rates of up to 8% on five-year FDs. This is why choosing the right bank is more important than ever.

A 5-Year FD is Special for Senior Citizens!

A five-year FD is considered special for senior citizens because:

The interest rate is locked in for a long period.

Regular interest can generate a monthly or quarterly income.

The option of a tax-saving FD is also available.

Unaffected by market fluctuations.
This is why FDs are considered the most reliable means for retirement planning. Let's find out how much interest public sector banks, private sector banks, and small finance banks are paying on 5-year bank FDs.

Small Finance Banks: The Players with the Highest Interest Rates
If we consider interest rates alone, small finance banks currently lead the list. These banks are offering higher returns to senior citizens than larger banks.

Small Finance Banks - Interest Rates for Senior Citizens on 5-Year FDs
Bank Name FD Interest Rate
Suryoday Small Finance Bank 8.00%
Jana Small Finance Bank 7.77%
Ujjivan Small Finance Bank 7.70%
Utkarsh Small Finance Bank 7.50%
Equitas Small Finance Bank 7.50%
Slice Small Finance Bank 7.25%
AU Small Finance Bank 7.25%
Small finance banks also offer government insurance coverage under the DICGC for deposits up to ₹5 lakh.

Private Sector Banks - Superior in Convenience and Service Quality
Private sector banks are a good option for senior citizens seeking balanced returns with slightly lower risk.

Private Banks - Interest Rates for Senior Citizens on 5-Year FDs
Bank Name FD Interest Rate
IDFC First Bank 7.50%
YES Bank 7.50%
SBM Bank India 7.50%
DCB Bank 7.25%
Axis Bank 7.20%
RBL Bank 7.20%
IndusInd Bank 7.15%
ICICI Bank 7.10%
HDFC Bank 6.90%

The interest rates here are slightly lower, but the network, digital convenience, and service quality are considered better.

PSU Banks: Lower Interest Rates, But Greater Trust
Many senior citizens still prefer government banks. The reason is simple: trust and security.

Public Sector Banks – Interest Rates for Senior Citizens on 5-Year FDs
Bank Name FD Interest Rate
State Bank of India 7.05%
Bank of Baroda 6.90%
Canara Bank 6.75%
Bank of India 6.75%
Punjab National Bank 6.60%
Indian Bank 6.50%
Union Bank 6.40%

PSU banks are suitable for those who prioritize peace of mind over high interest rates.

What should senior citizens consider when choosing an FD?
Don't just base your decision on the interest rate, but also consider the bank's financial position, insurance coverage on deposits, premature withdrawal terms, taxation, and TDS rules.

Which bank is right for you?
If you want the highest returns, small finance banks are better. If balance and service are essential, private banks are the right choice. And if complete security is your priority, PSU banks are still reliable. It is wise to decide after considering your needs, risk capacity, and investment amount.

Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.