In 2026, investing ₹25 lakh in a fixed deposit (FD) can provide a steady monthly income ranging from ₹13,500 to ₹16,500, depending on the bank and the investor's profile. With interest rates reaching up to 7.75%, fixed deposits are regaining popularity as a reliable income source amidst geopolitical tensions, particularly the US-Iran conflict, and a flat stock market, where the Nifty 50 has reported a -0.26% return over the past year. Senior citizens can benefit from higher interest rates, potentially earning closer to ₹16,000 monthly. The comparison of various banks shows that private banks, such as Yes Bank and Kotak Mahindra Bank, offer competitive rates compared to public sector banks like the State Bank of India. Moreover, senior citizens can also consider the Senior Citizens Savings Scheme (SCSS), which offers a government-backed interest rate of 8.2% with quarterly payouts, although it comes with investment limits and lock-in periods. Investors should be aware that the interest earned from both FDs and SCSS is taxable under the investor's income tax slab, and banks deduct TDS on interest exceeding a certain limit. Consulting a tax and investment professional is advisable to navigate these factors effectively.