Senior Citizen Fixed Deposit Interest Rate Hike pause: While repo rate hikes have led to an increase in fixed deposit interest rates, RBI deciding to pause the key lending rate hike would mean banks may not further increase FD rates.
While several banks have been increasing their Fixed Deposit rates for senior citizens and others since last year, it seems the FD rate hike cycle may be over, at least for now.
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The FD interest rate hikes have coincided with a series of repo rate hikes announced by the Reserve Bank of India. Since May 2022, the RBI has raised the repo rate by 250 basis points in a bid to fight inflation. However, in the first Monetary Policy Committee (MPC) meeting of the current financial year in April, the central bank kept the repo rate unchanged at 6.5%. In the ongoing meeting also, which will be declared tomorrow, the RBI is expected to keep on the pause button on the repo rate hike.
While repo rate hikes have led to an increase in fixed deposit interest rates, RBI deciding to pause the key lending rate hike would mean banks may not further increase FD rates. In future, if the repo rates go down, banks may even cut FD interest rates. Some bankers, however, feel that despite the repo rate pause, there is still room for an increase in FD interest rates.
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For investors interested in starting fixed deposits, it will be better to do so at the currently available higher interest rates.
While public sector banks are currently offering FD rates between 7% to 8%, some small finance banks are offering over 9% interest on FD to senior citizens as well as others. Following is a list of banks and the highest Fixed Deposit interest rates they are offering:
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| Bank FD Names | For General Citizens (p.a.) | For Senior Citizens (p.a) |
| RBL Bank | 3.50% to 7.80% | 4.00% to 8.30% |
| IDFC First Bank | 3.50% to 7.75% | 4.00% to 8.25% |
| KVB Bank | 4.00% to 7.50% | 5.90% to 8.00% |
| Canara Bank | 4.00% to 7.25% | 4.00% to 7.75% |
| Punjab National Bank | 3.50% to 7.25% | 4.00% to 7.75% |
| Bank of Baroda | 3.00% to 7.25% | 3.50% to 7.75% |
| Kotak Mahindra Bank | 2.75% to 7.20% | 3.25% to 7.70% |
| Axis Bank | 3.50% to 7.10% | 3.50% to 7.85% |
| HDFC Bank | 3.00% to 7.25% | 3.50% to 7.75% |
| State Bank of India | 3.00% to 7.10% | 3.50% to 7.60% |
| ICICI Bank | 3.00% to 7.10% | 3.50% to 7.60% |
| IDBI Bank | 3.00% to 6.75% | 3.50% to 7.25% |
| Yes Bank | 3.25% to 7.75% | 3.75% to 8.25% |
| IndusInd Bank | 6.25% to 7.75% | 6.75% to 8.25% |
| UCO Bank | 2.90% to 7.15% | 2.90% to 7.20% |
| Central Bank of India | 3.50% to 6.75% | 4.00% to 7.25% |
| Indian Bank | 2.80% to 6.70% | 3.30% to 7.20% |
| Indian Overseas Bank | 4.00% to 7.25% | 4.50% to 7.75% |
| Bandhan Bank | 3.00% to 8.00% | 3.75% to 8.50% |
| Suryoday Small Finance Bank | 4.00% to 9.10% | 4.50% to 9.60% |
| Ujjivan Small Finance Bank | 3.75% to 8.25% | 4.25% to 8.75% |
| ESAF Small Finance Bank | 4.00% to 8.50% | 4.50% to 9.00% |
| Unity Small Finance Bank | 4.50% to 9.00% | 4.50% to 9.50% |
| Jana Small Finance Bank | 3.75% to 7.35% | 4.45% to 8.05% |
| Utkarsh Small Finance Bank | 4.00% to 8.25% | 4.75% to 9.00% |
| Equitas Small Finance Bank | 3.50% to 8.50% | 4.00% to 9.00% |
| Fincare Small Finance Bank | 3.00% to 8.51% | 3.60% to 9.11% |
| AU Small Finance Bank | 3.75% to 8.00% | 4.25% to 8.24% |
| Capital Small Finance Bank | 3.50% to 7.60% | 4.15% to 8.25% |
| North East Small Finance Bank | 3.00% to 8.00% | 3.75% to 8.75% |
For investors with low-risk appetite, it is better to spread their FDs across multiple scheduled banks in such as way that the cumulative deposits with each of those banks do not exceed Rs 5 lakh.
