Senior citizen FD rates: Suryoday Bank offers 8.6% on five-year deposits; compare rates at SBI, HDFC Bank and others

Senior citizens looking to earn predictable returns on their retirement savings can get fixed deposit (FD) interest rates of up to 8.6% a year. However, rates vary significantly across banks, with small finance banks generally offering higher returns than large private and public sector lenders.

Suryoday Small Finance Bank is offering the highest five-year FD interest rate of 8.6% to senior citizens, according to Paisabazaar data as of 4 November 2026. Jana Small Finance Bank and DCB Bank follow with rates of 8% each.

Among large private sector banks, HDFC Bank offers 7.2%, while ICICI Bank offers 7.1%. State Bank of India (SBI) offers 7.05% on five-year deposits.

Here is a comparison of the highest five-year FD rates offered to senior citizens across different categories of banks.

Small finance banks offer the highest five-year FD rates to senior citizens

Small finance banks dominate the higher end of the five-year FD rate table. Suryoday Small Finance Bank offers 8.6%, followed by Jana Small Finance Bank at 8%.

Equitas Small Finance Bank and Slice Small Finance Bank offer 7.5% each, while Utkarsh Small Finance Bank offers 7.4%.

DCB Bank leads private lenders, while HDFC and ICICI offer lower returns

Among private sector banks, DCB Bank offers the highest five-year FD interest rate of 8% to senior citizens.

SBM Bank India and YES Bank offer 7.5%, while Axis Bank offers 7.35%. HDFC Bank, RBL Bank, Tamilnad Mercantile Bank and ICICI Bank offer rates of 7.2% or lower.

SBI offers the highest five-year FD rate among public sector banks

Public sector banks generally offer lower five-year FD rates than small finance banks. SBI offers the highest rate among public sector lenders at 7.05%, followed by Bank of Baroda at 6.9% and Punjab National Bank (PNB) at 6.85%.

Bank of India and Canara Bank offer 6.75% each.

Among foreign banks, Standard Chartered Bank offers 6.75%, Deutsche Bank 6.25% and HSBC 6% for five-year deposits.

Should senior citizens chase higher FD interest rates?

A higher interest rate can improve returns on retirement savings, but senior citizens should not choose a bank solely on the basis of its advertised rate.

One important consideration is deposit insurance. The Deposit Insurance and Credit Guarantee Corporation (DICGC) insures bank deposits up to ₹5 lakh per depositor per bank, including principal and accrued interest. Deposits held across different branches of the same bank are aggregated to calculate this limit.

This means senior citizens investing more than ₹5 lakh in a bank should understand that the excess amount is not covered by DICGC insurance. Deposits held with different banks receive separate insurance coverage, subject to applicable conditions.

Retirees should also check premature withdrawal conditions. A five-year FD may offer an attractive rate, but withdrawing money before maturity could result in a lower interest payout or a penalty, depending on the bank’s terms.

How is FD interest taxed for senior citizens?

Interest earned on bank FDs is taxable according to the depositor’s applicable income tax slab. Therefore, the effective return after tax could be lower than the advertised interest rate.

Senior citizens should also account for tax deducted at source (TDS). Banks deduct TDS when interest income exceeds the applicable threshold. Eligible senior citizens whose estimated tax liability is nil can submit Form 121 to request non-deduction of TDS.

Ultimately, senior citizens should compare post-tax returns, deposit insurance cover and premature withdrawal conditions before committing their retirement savings to a five-year FD.