Senior citizen FD rates up to 8.3% this month: Know offers | Personal Finance

Senior citizens can earn up to 8.25 per cent on fixed deposits (FDs) in late May, with small finance banks offering higher returns than large state-owned and private lenders.

Data compiled by Stable Money shows that while most major public sector banks are offering senior citizen FD rates between 6.75 per cent and 7.45 per cent, several small finance banks are offering rates above 8 per cent on select tenures.

Suryoday Small Finance Bank and Utkarsh Small Finance Bank are offering up to 8.25 per cent to senior citizens. Shivalik Small Finance Bank is offering up to 8.3 per cent on a special tenure deposit, while Unity Small Finance Bank is offering 8 per cent on one-year FDs.

Public banks offer lower but stable returns

Among public-sector lenders, Bank of India is offering the highest senior citizen FD rate at 7.45 per cent for a three-year tenure.

Other large banks include:

• 
  State Bank of India: Up to 7.05 per cent
• 
  Punjab National Bank: Up to 7.1 per cent
• 
  Bank of Baroda: Up to 7 per cent
• 
  Most public banks are offering around 6.75-7 per cent on one-year to five-year deposits for senior citizens.

Private banks and small finance banks lead rates

Several private banks are offering rates above 7.5 per cent for medium-term deposits.

For instance:

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  Bandhan Bank: 7.75 per cent
• 
  Yes Bank: 7.75 per cent
• 
  RBL Bank: 7.7 per cent
• 
  IDFC First Bank: 7.5 per cent
• 
  IndusInd Bank: 7.5 per cent

Meanwhile, HDFC Bank, ICICI Bank and Axis Bank are offering peak senior citizen FD rates between 7 per cent and 7.2 per cent.

“FD interest rates continue to remain attractive across banks, giving investors a good opportunity to lock in higher yields for the medium to long term,” said Saurabh Jain, cofounder and chief executive officer of Stable Money.

However, he cautioned investors against chasing only the highest rates.

“Along with returns, assessing the safety and fundamentals of the bank is equally important. Depositors should look at factors such as the bank’s asset quality, capital position, and overall stability,” he said.

What senior citizens should keep in mind

Financial planners say senior citizens should balance returns with safety while selecting FDs, especially because many retirees depend on interest income for regular expenses.

Experts suggest evaluating:

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  The financial strength of the institution
• 
  Deposit insurance coverage
• 
  Liquidity requirements
• 
  Tenure suitability
• 
  Diversification across banks