Fixed deposits continue to be a preferred choice for investors seeking steady and secure returns. For senior citizens, selecting the right bank becomes even more important to maximize their earnings. In October 2025, several leading banks are offering attractive FD interest rates—some exceeding 7%—making it an ideal time for senior citizens to lock in higher returns. In this Blog, we will take a closer look at the top banks currently offering the best FD rates.
Why are FD interest rates important?
Fixed Deposit (FD) interest rates directly influence how much your savings can grow over time. Even a small variation in rates can make a big difference to your overall returns, particularly for long-term deposits.
For senior citizens and cautious investors, FDs provide a reliable mix of safety and steady income. When interest rates are higher, investors enjoy better earnings without exposure to market volatility. On the other hand, falling rates can reduce interest income, which may affect regular cash flow—especially for retirees.
Keeping track of FD interest rates helps investors make informed choices about where and when to invest, the ideal tenure to choose, and which banks offer the right balance of security and returns. In a constantly shifting economic landscape, staying aware of rate trends supports smarter financial decisions and helps safeguard wealth.
List of Banks offering the Highest FD Interest Rates
1. Suryoday Small Finance Bank
- Interest Rate: 8.10% p.a. for senior citizens (5-year FD)
- Regular Rate: 7.60% p.a.
Suryoday leads the list in October 2025, offering one of the most rewarding FD returns among small finance banks.
2. Jana Small Finance Bank
- Interest Rate: 8.00% p.a. for senior citizens (1825 days)
Jana Bank provides attractive FD rates with the assurance of deposit protection, making it a strong contender for senior citizens seeking high yields.
3. Utkarsh Small Finance Bank
- Interest Rate: 7.70% p.a. for senior citizens (5-year tenure)
Utkarsh continues to deliver steady and competitive returns with the reliability of a regulated small finance bank.
4. HDFC Bank
- Interest Rate: Up to 7.10% p.a. for senior citizens (18–21 months tenure)
- Regular Rate: Up to 6.60% p.a.
HDFC Bank is a preferred choice for those valuing trust, brand reputation, and wide accessibility through its vast branch network.
5. ICICI Bank
- Interest Rate: Up to 7.10% p.a. for senior citizens (for select tenures up to 10 years)
ICICI Bank offers consistent returns and flexible tenure options, catering to both short-term and long-term investors.
6. Kotak Mahindra Bank
- Interest Rate: 7.10% p.a. for senior citizens (23-month FD)
- Regular Rate: 6.60% p.a. for others
Kotak’s mid-term FD rate stands among the highest in the private sector, balancing attractive returns with strong financial security.
7. Federal Bank
- Interest Rate: 7.20% p.a. for senior citizens (999-day FD)
Federal Bank offers slightly better rates than many peers for special tenures, rewarding depositors with higher medium-term returns.
8. State Bank of India (SBI)
- Interest Rate: 7.10% p.a. for senior citizens (Amrit Vrishti 444-day scheme)
- Long-term FDs (5–10 years): Around 6.95% p.a.
SBI remains a trusted choice for conservative investors, offering a balance of safety, stability, and decent returns through its special FD schemes.
Why should Senior citizens should keep a check on FD Rates?
For retirees, preserving capital and ensuring a regular income are top priorities. Fixed Deposits (FDs) continue to be one of the safest and most predictable investment choices—offering guaranteed returns and fixed tenures.
Senior citizens, generally aged 60 and above, benefit from an additional interest premium on their FDs—typically around 0.50% higher than standard rates. In October 2025, several banks, particularly small and niche ones, are offering attractive returns of up to 8.10% per annum on five-year deposits, making it a good time to review available options.
Important factors to consider before investing:
- Tenure: Higher rates are often limited to specific durations, such as 5-year terms.
- Deposit limit: Some banks offer the best rates only up to a certain investment amount (for example, ₹3 crore).
- Eligibility: Ensure the rate applies to the “senior citizen” category.
- Bank reputation and safety: Prefer well-regulated banks with insured deposits.
- Withdrawal and taxation: Check rules on premature withdrawals and tax deducted at source (TDS) to avoid surprises later.
How will it impact you?
If you’re a senior citizen planning to invest in fixed deposits in October 2025, here’s what you should keep in mind:
- Investing in a reputed small finance bank with a five-year FD can fetch attractive returns of around 8.0–8.1% per annum—significantly higher than what most larger banks offer. However, higher returns often come with higher risk. Before investing, assess the bank’s financial stability, branch network, and make sure your deposits don’t exceed the ₹5 lakh insurance limit covered under DICGC.
- If your priority is safety rather than chasing maximum returns, major public and private banks such as SBI, HDFC, or ICICI remain reliable choices, offering slightly lower rates in the 7–7.5% range with greater peace of mind.
- Always check the applicable tenure, as most 8%+ rates apply to long-term deposits (around 5 years). Avoid putting all your money into a single bank—diversifying across multiple banks can help manage risk.
- Remember that FD interest is taxable based on your income slab. Senior citizens whose total income (including FD interest) is below the exemption limit can submit Form 15H to avoid TDS deductions.
- Lastly, consider liquidity needs. If you expect to withdraw early, review the bank’s premature withdrawal penalties and how they might impact your returns. Keep an eye on rate trends, as FD rates can change quickly. Locking in a high rate now could prove beneficial if rates fall later.
What are the FD Rates of Public Sector Banks?
Among public sector banks, several have recently revised their fixed deposit rates, offering competitive returns to senior citizens.
State Bank of India (SBI) now offers 6.95% interest for senior citizens and 6.45% for regular customers on FDs with tenures of 2 to 3 years (effective from July 15, 2025).
Union Bank of India provides 6.6% for senior citizens and 6.1% for others on 3-year deposits.
Punjab National Bank (PNB) offers a higher 7.10% return on its 390-day FD, making it an attractive short-term option for senior citizens.
Canara Bank extends 7% interest to senior citizens and 6.5% to the general public on its 444-day FD scheme, effective from August 7, 2025.
Overall, public sector banks continue to provide stable and secure investment options, though returns may be slightly lower than those offered by smaller or private banks.
Final Thoughts
As of October 2025, senior citizens in India have several attractive options when it comes to fixed deposit investments. Those willing to commit funds for around five years and consider smaller but regulated banks can earn impressive returns of about 8.0–8.1% per annum. However, if capital safety and flexibility are your top priorities, opting for FDs from major public or private banks offering rates around 7% may be a wiser choice.
