After retirement, senior citizens are always concerned about the security of their savings and getting some additional monthly income along with pension. At this stage of life, they look for schemes that do not carry the risk of loss of principal and offer fixed, periodic returns. Investing in fixed income schemes is a great option for retired people or those approaching retirement, as it provides a stable and additional source of income. Now the main question is which banks are offering higher interest rates on Fixed Deposit (FD)?
**Small Finance Bank (SFB) is at the forefront in terms of interest rates**
According to Paisabazaar.com, the high interest rate segment is dominated by small finance banks (SFBs), while private and public sector banks (PSBs) offer comparatively lower rates. As per the latest update as of June 2026, Shivalik Small Finance Bank and Equitas Small Finance Bank are offering the highest interest rates on FDs for senior citizens – up to 8.5% (for certain tenures).
**List of small finance banks offering higher interest rates**
Equitas Small Finance Bank offers a maximum interest rate of 8.5% on its ‘Maxima FD’ for a tenure of three years and one day.
Shivalik Small Finance Bank offers 8.5% interest for a tenure of 23 to 27 months.
Jana Small Finance Bank offers 8.3% interest on deposits with tenures of more than two years and up to three years.
Suryoday Small Finance Bank offers interest up to 8.25% on deposits with tenure up to 5 years.
Utkarsh Small Finance Bank offers interest up to 8.30% on deposits with maturity up to 3 years.
Ujjivan Small Finance Bank offers interest up to 8.25% on deposits with maturity up to 3 years.
**How much will you earn on your deposit?**
If a senior citizen invests ₹10 lakh at an interest rate of 8.50%, they will get an interest of ₹85,000 annually. A big problem for senior citizens in this investment case is that if their earnings from Fixed Deposit (FD) exceed ₹ 50,000 in a financial year, the bank will deduct TDS. To avoid this, the person has to submit Form 15H.
