Senior Citizens

Financial News | Senior Citizens Can Now Earn Up to 7.85% on FDs — Check Full Bank List, Tax Rules & TDS Hacks

in

📅July 7, 2025

India’s Banking Sector Offers Relief Amid Economic Uncertainty

In the latest financial news that’s set to benefit millions of senior citizens across India, several leading private banks have announced FD interest rates of up to 7.85% for three-year fixed deposits — exclusively for those aged 60 years and above.

Amid a landscape of moderate inflation, cautious investment, and central bank interest rate fluctuations, this comes as a safe, high-yield opportunity for retired individuals looking for stable income with minimal risk.

Here Are the Top FD Rates for Senior Citizens (3-Year Tenure)

🏦 Bank 💸 FD Interest Rate (3 Years)
YES Bank 🔺 7.85%
SBM Bank 🔺 7.80%
Bandhan Bank 🔺 7.75%
RBL Bank 🔺 7.60%
IndusInd Bank 🔺 7.50%

📌 Note: These rates are for deposits up to ₹3 crore, and are current as of July 2, 2025, according to data from Paisabazaar.com.

Why This Is Big Financial News for Senior Citizens

For Indian senior citizens, fixed deposits (FDs) continue to remain a preferred savings instrument, especially given the volatile nature of equity markets, gold prices, and real estate returns.

With FD rates touching 7.85%, these fixed deposits are currently outperforming post office schemes and many debt mutual funds, making this an ideal time for:

  • Retirement income planning

  • Emergency fund parking

  • Monthly interest income (via non-cumulative FDs)

  • Low-risk wealth preservation

Financial Tip: Always ladder your FDs for liquidity + high returns. For example, split your amount across 1-year, 2-year, and 3-year tenures.

FD Interest & Taxation — Don’t Let TDS Eat Into Your Gains

Even though FD interest is taxable, there are smart ways to reduce or eliminate TDS deductions, especially for retirees.

What is TDS on FD Interest?
Banks are mandated to deduct TDS (Tax Deducted at Source) at 10% if your total FD interest in a financial year exceeds ₹1 lakh (for senior citizens).

BUT here’s the key: TDS doesn’t mean you owe tax. It simply means your bank is deducting it in advance, even if your actual income is below taxable limits.

How to Legally Avoid TDS: Submit Form 15H

If you are eligible, you can submit Form 15H to your bank and avoid TDS altogether.

New Tax Regime (FY 2025-26):

If your total income is up to ₹12 lakh, you can claim the Section 87A rebate and pay zero income tax, making you eligible to file Form 15H and avoid TDS.

Old Tax Regime:

If your income is up to ₹5 lakh, after all deductions (like 80C, 80D, etc.), you qualify for 87A rebate and can submit Form 15H as well.

💬 Even if your tax liability is nil, banks will still deduct TDS unless Form 15H is submitted, because they don’t know your final tax calculations.

Real Example:

Let’s say a senior citizen earns ₹11 lakh annually through pension + FD interest. Under the new tax regime, there’s no tax liability due to the ₹12 lakh 87A rebate. Still, the bank will deduct TDS if your annual FD interest crosses ₹1 lakh — unless you’ve filed Form 15H.

📌 Moral: Form 15H = Higher Net Returns in Hand

Market Context: Why Banks Are Offering Higher FD Rates?

As part of the recent financial news trends, here’s what’s happening behind the scenes:

  • 📉 Repo rate pause by RBI has pushed banks to attract longer-term depositors

  • ☀️ Anticipation of strong monsoon and liquidity flow ahead of FY26

  • 📈 Increased deposit competition from Small Finance Banks

  • 🧓 Special schemes for senior citizens becoming a trust-building strategy

💬 As per CII projections, India’s economy is expected to grow 6.4%–6.7% in FY26, and retail depositors are seeing this as a chance to lock-in high FD rates before further changes.

Smart Investor Insights: What Should You Do Now?

✅ Compare rates across private and small finance banks
✅ Use a trusted FD calculator (available at CreditSamadhaan.com)
✅ Submit Form 15H before your first FD payout to prevent TDS
✅ Track your total interest across multiple banks — TDS is calculated per bank, not in total
✅ Choose interest payout options (monthly/quarterly) for regular income

FINAL WORD FROM CREDIT SAMADHAAN

At Credit Samadhaan, we keep you updated with real, actionable financial news that matters to your life — whether it’s about credit score repair, FD updates, loan strategies, or tax-saving tips.

🔔 Want help choosing the right FD or submitting Form 15H?
🧾 Need a personalized tax-saving plan for retirement?
💼 Our financial advisors are just a click away.

Read More:

Follow Us for Daily Financial News & Tips

#CreditSamadhaan #FinancialNews #FDRatesIndia #SeniorCitizensFD #Form15H #TaxSavingsIndia #FixedDeposit2025 #BankingNewsIndia #RetirementPlanning #SafeInvestments #TaxPlanningIndia #PersonalFinanceIndia #HighReturnFD