Fixed deposits continue to be one of the safest and most trusted investment options for senior citizens.
With market uncertainty and changing interest rates, many retirees still prefer FDs for stable and predictable returns.
Recently, the RBI kept the repo rate unchanged at 5.25% in a meeting chaired by Governor Sanjay Malhotra. Earlier, the rate was reduced by 0.25% in December 2025.
Because the repo rate is stable for now, banks are unlikely to cut FD rates immediately, though reductions may happen later.
Repo Rate, Budget 2026, and What It Means for FDs
Budget 2026 did not announce any major changes for senior citizen fixed deposits.
However, the effect of earlier repo rate cuts is slowly showing up in bank interest rates.
If you already have an FD, your interest rate will stay the same until maturity.
But if you are planning to open a new FD, the rate you get will depend on current market conditions, which may change over time.
Banks Offering the Highest FD Rates for Senior Citizens
At present, Small Finance Banks (SFBs) are offering higher FD interest rates compared to large private and public sector banks.
This makes them attractive for senior citizens looking for better returns.
Here are some of the top FD rates available in 2026:
Utkarsh Small Finance Bank is offering up to 8.00% for a 3-year tenure.
Jana Small Finance Bank also offers up to 8.00% for 2 to 3 years.
Yes Bank provides up to 7.75% for tenures between 36 and 60 months.
ICICI Bank offers up to 7.10% for tenures starting from 3 years and 1 day up to 10 years.
Canara Bank offers 7.00% for a special 555-day FD.
HDFC Bank provides up to 6.95% for tenures between 21 months and 2 years 11 months.
TDS Rules Senior Citizens Should Know
Tax rules on FD interest are slightly more relaxed for senior citizens.
Banks deduct TDS only if the total interest earned in a single bank exceeds ₹1,00,000 in a financial year.
If your total income is not taxable, you can submit Form 15H at the start of the financial year to avoid TDS.
In case TDS is deducted by mistake, you can claim a refund while filing your income tax return.
Final Thoughts for Investors
Senior citizens still have good opportunities to earn 7.5% to 8% interest, especially through small finance banks.
However, for safety, it is advisable to spread investments across multiple banks instead of putting all funds in one place.
With careful planning and timely decisions, fixed deposits can continue to provide steady income and financial peace of mind.
