Senior Citizens See Fresh Gains: Major Banks and SFBs Revise FD Rates

India’s senior citizens have new reasons to review their savings strategies, as several major banks—including Indian Overseas Bank (IOB), Bandhan Bank, Dhanlaxmi Bank—and five small finance banks (SFBs) have revised fixed deposit (FD) interest rates for those aged 60 and above. The changes, effective July 2025, offer both opportunities and considerations for retirees seeking stable returns.

 

Key Highlights

 

•⁠  ⁠Bandhan Bank now offers senior citizens up to 7.90% interest for FDs of two to less than three years, 7.75% for one year to less than two years and three to less than five years, and 6.60% for five to ten years. The tax-saving FD for seniors stands at 7.50% for five to ten years. These rates are effective from July 1, 2025, and are available only to resident Indians.

 

•⁠  ⁠Dhanlaxmi Bank revised its rates twice within a month, with the latest update on July 1, 2025. Seniors can now earn 7.75% for FDs of more than five years up to ten years, reflecting a reduction from previous rates. The bank continues to offer a 0.50% premium over standard rates for seniors.

 

•⁠  ⁠Unity Small Finance Bank leads with some of the highest rates, offering seniors up to 8.25% for 1001 days, 8.00% for more than five years up to ten years, and 7.75% for three to five years. Other SFBs have also adjusted rates upward, making the segment highly competitive.

 

•⁠  ⁠The revised rates are a response to the evolving interest rate environment and growing demand for secure, high-yield instruments among retirees.

 

What Seniors Should Consider

 

•⁠  ⁠Locking in higher rates now could be beneficial, especially as market rates may fluctuate in the coming quarters.

 

•⁠  ⁠Senior citizens should compare tenures and rates across banks, considering both returns and liquidity needs.

 

•⁠  ⁠Additional documentation, such as PAN, address, and identity proof, is required for opening or renewing FDs.

 

Sources: Outlook Money, Paisabazaar, Bandhan Bank, Dhanlaxmi Bank, Scripbox