Some banks are still offering up to 8% interest on Fixed Deposit (FD) with a tenure of 3 years to senior citizens aged 60 years and above. This rate is applicable on deposits up to a maximum of Rs 3 crore. See below which banks are giving FD interest up to 8% to senior citizens.
FD interest rate for senior citizens
- Utkarsh Small Finance Bank – 8% interest on 3 year FD
- Jana Small Finance Bank – 8% interest on 3 year FD
- Ujjivan Small Finance Bank – 7.7% interest on 3 year FD
- AU Small Finance Bank – 7.6% interest on 3 year FD
Rates of other banks
- AU Small Finance Bank — 7.60%
- Equitas Small Finance Bank — 7.50%
- ESAF Small Finance Bank — 6.50%
- Jana Small Finance Bank — 8.00%
- Shivalik Small Finance Bank — 7.25%
- Slice Small Finance Bank — 7.50%
- Suryoday Small Finance Bank — 7.45%
- Ujjivan Small Finance Bank — 7.70%
- Utkarsh Small Finance Bank — 8.00%
When is TDS deducted on FD?
If the interest received from your FD in any one bank exceeds Rs 1 lakh annually, then the banks deduct TDS (Tax Deducted at Source). Keep in mind TDS is not an additional tax. You can adjust it in your tax or get it back as a refund while filing income tax return (ITR). If refund is made, interest can also be earned on it.
No tax on income up to Rs 12 lakh
For example, if the annual income of a senior citizen is Rs 11 lakh, then in the new tax system for the financial year 2025-26, he will not have to pay income tax due to the exemption of Section 87A. In the new tax system, this exemption is applicable on income up to Rs 12 lakh.
Form 15H to avoid TDS
If your total income after all deductions and Section 87A exemption is less than the tax limit, then senior citizens can avoid deducting TDS by submitting Form 15H.
- The limit in the new tax system is Rs 12 lakh
- The limit in the old tax system is Rs 5 lakh
According to Chartered Accountant Dr. Suresh Surana, Form 15H is a self-declaration form which people aged 60 years and above can submit if their total tax liability is zero. In the new tax system, the basic exemption limit is Rs 4 lakh, but due to the increased exemption of Section 87A, those earning up to Rs 12 lakh do not have to pay tax, hence they can give Form 15H. In the old tax system, the exemption limit was Rs 3 lakh, which went up to Rs 5 lakh for those aged 80 years and above. If the taxable income is less than this limit, then Form 15H can be given.
urgent matter
Even if tax is not payable if your income is less than Rs 12 lakh, banks can still deduct TDS. This is because banks do not know your total tax status and as per the rules, it is necessary to deduct TDS if the interest is more than Rs 1 lakh. Therefore, it is better to submit Form 15H on time, so that unnecessary TDS deduction can be avoided.