Senior citizens can earn up to 8% interest on FDs, find out which banks offer this opportunity

If you're 60 years or older and looking for a safe investment, fixed deposits (FDs) remain a strong option. Notably, some banks are offering senior citizens interest rates of up to 8% on 3-year FDs. However, these rates apply to investments up to a maximum of ₹3 crore.

Who is paying the highest interest?

Utkarsh Small Finance Bank and Jana Small Finance Bank are offering senior citizens up to 8% interest on 3-year FDs. These are among the highest-yielding options currently.

Other options up to 7.5%7.7%

If you're looking for slightly lower but stable returns, Ujjivan Small Finance Bank offers 7.7% interest. AU Small Finance Bank (7.6%), Equitas Small Finance Bank (7.5%), and Slice Small Finance Bank (7.5%) are also good options.

When is TDS deducted?

If the annual interest from a senior citizen's FD exceeds ₹1 lakh, banks deduct TDS. However, this is not an additional tax. You can adjust it when filing your Income Tax Return (ITR) or get it back as a refund.

Easy way to save tax

If your total income is not taxable, you can avoid TDS by filing Form 15H. Under the new tax system, income up to ₹12 lakh is exempt from tax, so senior citizens falling within this limit can take advantage of this facility.

Keep this in mind before investing

Even if your income is tax-free, banks deduct TDS on interest exceeding ₹1 lakh, as per regulations. 

Therefore, it's important to submit Form 15H on time to avoid unnecessary deductions. FDs remain a safe and attractive investment for senior citizens, especially with interest rates reaching 8%.