Top Fixed Deposit Interest Rates for Senior Citizens in May 2026: A Comparison
Highest FD interest rates for senior citizens in May 2026: PSU vs private vs small finance banks with their top fixed deposit schemes
The Economic Times
Image: The Economic Times
Senior citizens seeking stable income through fixed deposits (FDs) can find attractive interest rates across various banks in May 2026. Small finance banks currently offer the highest rates, with ESAF Small Finance Bank leading at 8.5% for a tenure of 501 days. Public sector and private banks also present competitive options.
- 01ESAF Small Finance Bank offers the highest FD rate at 8.5% for 501 days.
- 02Public sector banks generally provide lower rates compared to small finance banks.
- 03Senior citizens can benefit from additional interest rates of 0.25% to 0.50%.
- 04TDS on FD interest for senior citizens has a higher exemption limit of ₹1,00,000.
- 05Fixed deposits offer stability and flexibility for senior citizens.
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In May 2026, senior citizens looking for fixed deposits (FDs) can choose from a variety of banks offering competitive interest rates. The highest rate is provided by ESAF Small Finance Bank at 8.5% for a tenure of 501 days. Other notable rates include 8.3% from Shivalik Small Finance Bank for 21 months and 8.25% from Suryoday Small Finance Bank for 30 months. Private banks like SBM Bank India offer 8.35% for a tenure of 391 days to 15 months, while public sector banks like Punjab & Sind Bank provide rates of 7.25% for 666 days. Senior citizens benefit from additional interest rates on FDs and can withdraw prematurely with minimal penalties. However, TDS is applicable on FD interest, with a higher exemption limit of ₹1,00,000 for the financial year.
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The competitive FD rates provide senior citizens with reliable income options, helping them manage their finances effectively.
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