It seems that the high-interest-rate regime, which prevailed for almost three years, has come to an end in the wake of the RBI slashing the repo rate by 100 basis points (bps) this year. However, there are some private sector banks that are still offering attractive interest rates on their fixed deposits (FDs) for senior citizens.
If senior citizens are planning to invest in fixed deposits (FD) in 2025, then they can probably look at some small finance banks and private sector banks to park their money. At present, many banks are giving more than 8% interest on FDs to senior citizens, which can be considered a better option considering the current market conditions.
According to Bankbazaar.com data, banks like Suryodaya Small Finance Bank, Unity Small Finance Bank, Equitas Small Finance Bank, Jana SFB are offering more than 8% to senior citizens. Most of these banks offer 50 bps higher interest on FDs to senior citizens than the rates they offer to general customers.
The following banks are offering the highest interest rates on their FDs for senior citizens:
| Bank | Highest advertised rate | Tenure |
| Suryodaya Small Finance Bank | 8.40% | 1825 days (5 years) |
| Unity Small Finance Bank | 8.25% | 1001 days |
| Equitas Small Finance Bank | 8.20% | 888 days |
| Jana Small Finance Bank | 8.20% | 1095 – 1825 days (3-5 years) |
| Utkarsh Small Finance Bank | 8.15% | 730 – 1095 days (2-3 years) |
| ESAF Small Finance Bank | 8.10% | 444 days |
| Ujjivan Small Finance Bank | 8.10% | 730 days (2 years) |
| IndusInd Bank | 7.98% | 402 – 730 days (1.1 – 2 years) |
| Yes Bank | 7.85% | 1080 – 1800 days (36-60 months) |
| AU Small Finance Bank | 7.82% | 767 to 1095 days (2.1-3 years) |
| RBL Bank | 7.70% | 767 to 1095 days (2.1 – 3 years) |
| Note: Highest interest rates as advertised on the company’s website on July 25, 2025; Subject to change as per the company’s policies. Compiled by BankBazaar.com | ||
“Rising living costs and unpredictable returns from market-linked products are two major challenges retirees face today. Fixed deposits for senior citizens offer a simple and reliable way to earn steady returns while keeping capital safe,” says Adhil Shetty, CEO, BankBazaar.
With rates up to 8.40%, this is also a good time to lock in, feels Shetty. “Ladder your FDs across different maturities to balance liquidity with better yields. If you rely on regular income, opt for monthly or quarterly interest payouts to meet day-to-day expenses without touching your principal,” says Shetty.
Why are small banks giving more interest?
Small finance banks and banks with a smaller customer base are known to offer higher interest rates on FDs as compared to large private and public sector banks. The main reason for this is that these banks have to offer additional attractions to increase their deposit base. Large and stable banks already have a strong customer base and they usually do not need to pay high interest to raise deposits. This is why their FD rates are relatively low.
Interest rates soften in 2025
In recent months, the RBI has cut the repo rate by 100 basis points (1%), making loans cheaper for banks. This has also affected deposit schemes and many banks have reduced interest rates on FDs. However, small finance banks are still offering higher interest rates so that they can attract more and more depositors.
Safe option for senior citizens
FD is a popular investment option among Indian investors, especially senior citizens, as it not only gives fixed returns but is also considered relatively safe.
Deposits in banks are also provided by the government with an insurance cover (DICGC) of up to Rs 5 lakh, which provides basic protection to investors in case of default.
Which banks are getting the highest interest?
Below is a list of banks that are paying the highest interest on FDs to senior citizens (as per the information available on bank websites till 25 July 2025):
Summing up…
If you are a senior citizen and are looking for a safe, fixed income option, then these FD schemes can be beneficial for you. But before investing, keep in mind the credibility of the bank, the validity period of the interest rate and the rate changes coming from time to time. While the returns on FDs may be stable, choosing the right bank and the right tenure can make a huge difference to your overall earnings.