Senior Citizen FD rates go up to 8.10% - How bank deposits compare with SCSS, post office schemes

Senior citizens looking for stable and predictable income have a wide range of options in 2026, with fixed deposit (FD) rates offered by banks and NBFCs ranging from 2.5% to 8.10% annually. In addition to bank deposits, government-backed schemes such as the Senior Citizen Savings Scheme (SCSS) and Post Office Monthly Income Scheme (POMIS) continue to offer attractive returns and regular income.

Most banks provide resident senior citizens aged 60 years and above an additional 50 basis points over regular FD rates. Some lenders also offer special deposits that provide an extra 20-30 basis points for specific tenures.

Private banks and small finance banks

Private sector lenders such as SBM Bank, RBL Bank, Bandhan Bank and IndusInd Bank, along with small finance banks including AU Small Finance Bank, Jana Small Finance Bank, Suryoday Small Finance Bank and Ujjivan Small Finance Bank, are among those offering the highest FD rates of 7% and above to senior citizens.

These higher yields have made fixed deposits an attractive option for retirees seeking guaranteed returns without exposure to market volatility.

MUST READ: Unity Bank, AU Small Finance Bank raise FD rates; senior citizens can earn up to 8.30%

Public sector banks

Among public sector banks, Bank of India currently offers one of the highest rates at 7.45% for senior citizens. Indian Bank follows with 7.30%, while Punjab & Sind Bank offers up to 7.25%.

State Bank of India, the country's largest lender, offers up to 7.05%, including 6.75% for one-year deposits and 7.05% for five-year deposits.

Other major lenders such as Bank of Baroda, Canara Bank, Indian Overseas Bank and Punjab National Bank offer rates between 7% and 7.10% for select tenures.

These rates are applicable to deposits below ₹3 crore and are updated as of June 10, 2026.

MUST READ: PPF vs bank FDs vs debt funds: How much would ₹10 lakh have grown in one year?

SCSS

For seniors prioritising safety and regular income, the Senior Citizen Savings Scheme continues to be one of the most attractive avenues.

SCSS currently offers 8.2% per annum, with interest paid quarterly. The scheme has a five-year tenure, extendable by another three years, and allows investments up to ₹30 lakh.

Apart from offering government backing, investments in SCSS qualify for deductions under Section 80C of the Income Tax Act. However, interest earned under the scheme remains taxable.

Individuals aged 60 years and above are eligible to open SCSS accounts, while certain retired employees and defence personnel can join at lower ages, subject to conditions.

Monthly income option for retirees

Another popular choice is the Post Office Monthly Income Scheme (POMIS), which currently offers 7.4% per annum with monthly payouts.

The scheme is designed for retirees seeking a regular stream of income. Individuals can invest up to ₹9 lakh in a single account and ₹15 lakh in a joint account.

Premature withdrawal is allowed after one year, though penalties apply depending on the timing of closure.

Post Office Time Deposits

Post Office Time Deposits provide guaranteed returns ranging from 6.9% to 7.5% across one-year to five-year tenures.

Unlike banks, the Post Office does not offer additional interest benefits to senior citizens under this scheme, with rates remaining the same for all depositors.

The five-year time deposit also qualifies for tax deductions under Section 80C.

With interest rates remaining elevated, senior citizens now have multiple options to balance safety, regular income and tax efficiency. Financial planners say the right mix depends on liquidity needs, income requirements and investment horizons.