Best fixed deposit rates for senior citizens: Fixed deposit rates offered by banks and non-bank lenders have come down significantly ever since the Reserve Bank started lowering the repo rate in December last year. The RBI has cut its benchmark lending rate or repo rate by 100 bps – starting December 2024 through June 2025 – to 5.5% per annum. This led to a softer interest rate regime in the country, also bringing the fixed deposit rates to multi-year lows.
However, there are some small finance banks still offering 8% or more to senior citizens on various fixed deposit tenors.
Suryoday Small Finance Bank offers 8% and more to both general customers, senior citizens
Suryoday Small Finance Bank offers attractive rates on FDs to senior citizens as well as normal customers, effective December 3, 2025.
The bank, as part of its commitment to help customers “Save More. Earn More. Smile More”, has announced a “revised structure” of fixed deposit interest rates.
“The bank continues to offer some of the most competitive rates in the industry, with the highest interest rate of 8.00% per annum on a 5-year deposit for both regular and senior citizen customers,” the SFB said in a release.
Senior citizens continue to receive enhanced benefits, with FD rates going up to 8.24%, further strengthening the bank’s promise of rewarding long-term savers and those seeking steady, dependable income, it said.
“With flexible FD options from 7 days to 10 years, Suryoday SFB continues to cater to a wide spectrum of customer needs—short-term liquidity, regular monthly income, and long-term wealth creation,” it said.
Key highlights of the new FD rates
give a simple explanation of the difference between per annum rates and annualised yield here. write in simple English so that readers can understand that
Under the revised rate structure (for deposits below Rs 3 crore), customers can now avail:
8.00% p.a. (8.24% annualised yield) for a 5-year FD for regular customers
8.00% p.a. (8.24% annualised yield) for a 5-year FD for senior citizens
7.25% p.a. (7.45% annualised yield) for a 1-year FD, applicable for both domestic and NRE/NRO deposits
7.25% p.a. (7.45% annualised yield) for tenures ranging from 1 year to 36 months
Note: Per annum (p.a.) rate is the plain vanilla interest rate the bank promises for one year. Annualised yield shows the effective return you get when interest is compounded during the year.
In other words: p.a. rate = the headline rate. Annualised yield = the real return after adding the impact of compounding.
So, when a bank says 8% p.a. and 8.24% annualised yield, it means the official rate is 8%, but because interest is added to your deposit at regular intervals (compounding), your effective return becomes 8.24% by the end of the year.
FD rates of other small finance banks
Besides Suryoday Small Finance Bank, there are some other small finance banks which offer up to 8% FD rates, according to PaisaBazaar website.
Customers must note risk factors
Small finance banks typically offer higher fixed deposit rates than large banks to attract customers, but they may carry a higher credit risk. Both types of banks provide Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance for FDs up to Rs 5 lakh, making deposits in both relatively safe up to that limit. The DICGC, a wholly-owned subsidiary of the Reserve Bank of India, protects depositors by insuring their deposits against bank failures or other bank crises.
