Fixed deposits (FDs) remain a popular choice for investors, specially senior citizens who are looking for stable returns and high interest rates in their retirement period. Small finance banks are currently offering some of the highest senior citizen FD rates, which go up to 8.50%.Before investing in an FD, it is important to check the interest rate, tenure, premature withdrawal rules, among other key factors. Highest senior citizen FD interest rates from small finance banksFor senior citizens, small finance banks including Equitas Small Finance Bank, ESAF Small Finance Bank and Suryoday Small Finance Bank are offering the highest FD interest rate of 8.50% per annum each on tenures of 3 years and one day, 800 days and 5 years, respectively.Highest senior citizen FD interest rates from small finance banksBank NameHighest FD rate (p.a.)TenureEquitas Small Finance Bank8.50%3 years 1 day (Maxima FD)ESAF Small Finance Bank8.50%800 daysSuryoday Small Finance Bank8.50%5 yearsJana Small Finance Bank8.30%Above 2 years to 3 yearsUjjivan Small Finance Bank8.30%3 years 1 day to 3 years 6 monthsHighest senior citizen FD interest rates from public sector banksBank of India offers the highest FD interest rate of 7.45% per annum to senior citizens among public sector banks, on a tenure of 3 years. Punjab & Sind Bank offers an FD interest rate of 7.35% on a 666-day tenure.Bank of Baroda offers an FD interest rate of 7.25% per annum on its 555-day BoB Golden Goal Deposit Scheme.Bank NameHighest FD rate (p.a.)TenureBank of India7.45%3 yearsPunjab & Sind Bank7.35%666 daysBank of Baroda7.25%555 days – BoB Golden Goal Deposit SchemeCentral Bank of India7.25%444 daysBank of Maharashtra7.15%400 daysHighest senior citizen FD interest rates from private sector banksDCB Bank is offering the highest FD interest rate of 8.00% per annum to senior citizens on select tenures: 24 months to less than 25 months, 34 months to less than 35 months and 60 months to 61 months.Bandhan Bank is offering an FD interest rate of 7.95% per annum on deposits of 2 years to less than 3 years.SBM Bank India is offering a 7.80% rate on tenures of more than 18 months to less than 2 years and 3 days.IndusInd Bank is offering an FD interest rate of 7.75% per annum on a tenure of 2 years to 3 years.Bank NameHighest FD rate (p.a.)TenureDCB Bank8.00%24–<25 months; 34–<35 months; 60–61 monthsBandhan Bank7.95%2 years to less than 3 yearsSBM Bank India7.80%Above 18 months to less than 2 years 3 daysIndusInd Bank7.75%2 years to 3 yearsYES Bank7.75%18 months 1 day to <24 months; 36 months to <60 monthsSource: Paisabazaar as on September 2, 2026Are your fixed deposits insured?For bank deposits, the Deposit Insurance and Credit Guarantee Corporation (DICGC) provides an insurance cover of up to Rs 5 lakh per depositor per bank, including principal and interest, subject to the applicable rules. This is particularly relevant when you are depositing a large amount in FDs.When is TDS deducted from bank FDs?Banks are mandated to deduct tax deducted at source (TDS) if the interest from a fixed deposit (FD) for a senior citizen crosses Rs 1 lakh in a specific bank. Remember, the TDS isn’t an additional tax; you can get it back as a tax refund or offset it against your total tax liability when you file your income tax return (ITR). Plus, if you are eligible for a tax refund, you might also be eligible for interest on the refund.