3 private banks promising 7.50% interest on tax-saving FDs for senior citizens


Tax-saving fixed deposits are the most popular choice for debt investors who wish to reduce their tax liability. A prominent fixed income product for investors is the tax-saving fixed deposit (FD), which allows for an annual deduction of up to 1.5 lakh under Section 80C. However, 5 years of lock-in time are required for tax-saving fixed deposits, and as the name implies, no premature withdrawals are permitted. For older adults, tax-saving fixed deposits are ideal since they reduce their tax burden while simultaneously providing a steady source of income in the form of interest rates in their golden years.

Senior citizens are generally tax-exempt for interest payments received on deposits up to 50,000 under section 80 TTB. If interest payments exceed the 50,000 exempt limit in a fiscal year that is subject to TDS, a senior citizen can minimize TDS deduction by filing Form 15H. Elderly individuals can consider investing in a tax-saving fixed deposit in the face of rising interest rates, and since retail inflation in India, at 6.71% in July, is currently standing around a five-month low, they can now get returns on their fixed deposits that outperform inflation while also receiving the benefits of DICGC coverage. From the private sector space, here are the 3 banks offering inflation-beating returns of 7.50% to senior citizens on tax-saving fixed deposits.

Bandhan Bank

On August 22, 2022, private sector lender Bandhan Bank last adjusted its interest rates. Following the revision, the bank is now providing elderly residents with a fixed interest rate of 7.50% on tax-saving fixed deposits. NRIs are not eligible for senior citizen rates, which are exclusively available to residents of India. Senior citizen rates are available to those who submit proof of age to the bank.

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Bandhan Bank FD Rates (bandhanbank.com)

Yes Bank

Interest rates for Yes Bank’s fixed deposits are effective as of August 10, 2022. After the modification, the bank is now giving elderly residents an interest rate of 7.50% on 5-year tax-saving fixed deposits. Only domestic deposits are subject to senior citizen rates, and an FD must be opened with at least INR. 10,000/-. Senior citizens have the option to receive quarterly payouts or reinvest their tax-saving fixed deposits, and they can also benefit from higher interest rates, tax exemptions, and YES Rewardz Points when they book Tax Saver FDs.

Yes Bank FD Rates

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Yes Bank FD Rates (yesbank.in)

IndusInd Bank

IndusInd Bank’s fixed deposit interest rates are in effect as of August 12th, 2022. Subject to the most recent adjustment, the bank is now providing an interest rate of 7.50% on its Indus Tax Saver Scheme (5 years). Senior individuals can open a tax-saving FD account with IndusInd Bank by depositing a minimum amount of Rs. 10,000, up to Rs. 1.5 lakh per fiscal year.

IndusInd Bank FD Rates

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IndusInd Bank FD Rates (indusind.com)

Tax-saving FDs have a lock-in duration of five years, which is considerably less than the lock-in time for other tax-saving instruments like PPF accounts. Depending on your tax bracket, residents of India or Hindu Undivided Families (HUFs) may be able to claim tax deductions of up to Rs. 1.5 lakh deposited in a tax-saving fixed deposit under Section 80C of the Income Tax Act. Consequently, by simply implementing proper tax-saving investments, you can save up to Rs. 46,800 in taxation under Section 80C with a 4% cess if you are in the highest tax category of (30%) and deposit Rs. 1.5 lakh per annum in a tax-saving instrument.


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