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Banks are expected to start lowering the rates on FDs in alignment with the decrease of the benchmark lending rate by the Central bank.
Latest FD rates for senior citizens.
Bank FD Rates For Senior Citizens: The Reserve Bank of India (RBI) in its February MPC meeting 2025 had unanimously decided to cut the repo rate by 25 bps to 6.25 per cent from 6.50 per cent for the first time in nearly five years. The decision is expected to have various consequences in the banking and financial sector soon. Although it may lower the burden of EMI (Equated Monthly Installment) for borrowers, the days of higher interest rates on Fixed Deposits might become a remnant of the past.
Banks are expected to start lowering the rates on FDs in alignment with the decrease of the benchmark lending rate by the Central bank.
It opens a window for customers to avail the higher interest rates on fixed deposits before banks decrease them eventually. FDs are considered a safe-haven financial instrument where investors can park their capital risk-free and earn a pre-determined quarterly/half-yearly/yearly interests on the capital.
Latest Interest Rates Being Offered On FDs By Small Finance Banks:
Small Finance Banks are offering the highest interest rates on fixed deposits to customers, especially senior citizens up to 9.42 per cent as of now. Utkarsh Small Finance Bank is offering 9.42 per cent interest on its deposit for senior citizen maturing in 1500 days, while the rate is 7.98 per cent for non-senior citizens. Similarly, Au Small Finance Bank is offering a 8.88 per cent interest to senior citizen for an FD maturing in 18 months.
| Small Finance Bank | Interest Rates | Tenure |
| AU Small Finance Bank | 8.88 | 18 months |
| ESAF Small Finance Bank | 8.88% | 888 days |
| Suryoday Bank | 9.42% | 5 years |
| Utkarsh Small Finance Bank | 9.42% | 1500 days |
| Jana Small Finance Bank | 8.75% | 365 days |
Top Banks’ Latest FD Rates:
| Top Banks | Interest Rates | Tenure |
| HDFC Bank | 7.85% | 2 years 1 day to < 2 year 100 months |
| ICICI Bank | 7.85% | 15 months to < 18 months |
| Axis Bank | 7.60% | 2 years < 30 months |
| Bank of Baroda | 7.65% | Above 2 years and up to 3 years |
| SBI Bank | 7.50% | 5 years and up to 10 years |
| Canara Bank | 8.14% | 3 years and above to less than 5 years |
Threshold For TDS deduction On Senior Citizens’ FD Rates Hiked
Moreover, the Government has hiked the threshold for TDS deduction from Rs 50000 to Rs 1 lakh from April 01, 2025. Therefore, the tax deducted on senior citizens’ fixed deposits will be less. TDS will be imposed on interest income from savings accounts, fixed deposits and recurring deposits in case it crosses Rs 1 lakh in a financial year for senior citizens.
For general public, the limit is still Rs 50000 in a financial year. So, TDS will be imposed if the interest income crosses Rs 50000.
FD rates are taken as available on banks’ official websites as of February 10, 2025. Banks may tweak the rates following the repo rate cut by the Central Bank. Investors are advised to check the rates before investing in any FD scheme.
