Fixed Deposits · Senior citizen
Senior Citizen Fixed Deposits
Banks offer 0.25-0.75% higher rates on FDs for investors aged 60+. Combined with Section 80TTB (₹50,000 deduction on bank interest for seniors) and SCSS (8.2% sovereign, ₹30L cap), this is the strongest FD-style return-package India offers. Top rates 7.5-8.5% across tenures.
Who needs this
Investors aged 60+. Anyone managing a parent's or grandparent's retirement corpus. Pre-retirees structuring post-retirement income (FD ladder + SCSS + PMVVY).
At a glance
Eligibility
Age 60+
On the date of FD booking
Rate bonus
+0.25-0.75%
Over general FD rates
Top rate
8.5%
Small finance bank 3-5 yr
Sec 80TTB deduction
₹50K/yr
Bank/PO interest, old regime
TDS threshold
₹50K
Vs ₹40K for general public
DICGC cover
₹5 lakh
Per depositor per bank
Top banks — Senior citizen
Source: bank rate cards · verified FY26 Q1
| Bank | Type | General % | Senior % |
|---|---|---|---|
Unity Small Finance Bank 3-yr tenure | SFB | 8.50% | — |
AU Small Finance Bank 5-yr tenure, peak rate | SFB | 8.60% | — |
Post Office (SCSS) 5-yr, max ₹30L corpus | Post Office | 8.20% | — |
IDFC First Bank 1-3 yr tenure | Private | 8.00% | — |
Bank of Baroda 3-5 yr tenure | PSU | 7.65% | — |
SBI WeCare 5-10 yr senior-only product | PSU | 7.50% | — |
Key decisions
Senior FD vs SCSS — which is better?
SCSS (Senior Citizen Savings Scheme): 8.2% sovereign-backed, 5-year tenure, max ₹30L corpus, interest paid quarterly. Senior FD: 7.5-8.5% (varies by bank/tenure), bank-backed (DICGC ₹5L), flexible tenures. Use SCSS up to ₹30L cap first (highest safe rate available to seniors), then layer senior FDs on top.
How does Section 80TTB work?
Old regime only: seniors get ₹50,000 deduction on interest income from banks + post-office + co-operative banks. Replaces the ₹10,000 80TTA limit for general public. Effectively makes the first ₹50K of senior-FD interest tax-free per FY (then slab rate kicks in).
Should I spread across multiple banks?
Yes — DICGC covers ₹5L per depositor per bank, not per FD. If you have ₹30L to deposit, splitting across 6 banks at ₹5L each maximises DICGC coverage. With senior-FD rate bonuses, the rate difference between banks is usually small enough that DICGC diversification wins over chasing the absolute top rate.
Useful calculators
Regulatory notes — RBI / DICGC / IT Act
- Senior-citizen FD bonus is bank-specific (not mandated); typically 0.25-0.75% above general rate.
- Sec 80TTB (₹50K interest deduction) applies only in the OLD tax regime, only for age 60+.
- TDS threshold for seniors is ₹50,000/yr (vs ₹40,000 for general public).
- SCSS is administered by India Post and PSU banks; rate is set quarterly by Ministry of Finance.
- DICGC insurance covers up to ₹5 lakh per depositor per bank (no senior-specific premium).