Senior FD Rate Showdown: Which Bank Offers The Best Returns On Rs 1 Lakh In 2025?
For senior citizens looking for secure and predictable returns, fixed deposits (FDs) remain a popular investment choice. With several major Indian banks offering higher interest rates to customers over 60, it becomes essential to evaluate which option delivers the most value. Whether you're seeking short-term growth or long-term stability, comparing FD schemes across lenders such as the State Bank of India (SBI), Bank of Baroda (BoB), and HDFC Bank could help you maximise your earnings. Here’s a closer look at the latest rates, projected returns, and other key information to help senior investors make an informed decision.
SBI FD Schemes: Consistency with Competitive Returns
The State Bank of India provides reliable fixed deposit options tailored to seniors. On a 1-year deposit, the bank offers an interest rate of 7.30%, making it a decent short-term investment option. For medium-term goals, the 3-year deposit comes with a 7.25% rate. Meanwhile, both 5-year and 10-year deposits earn a slightly higher rate of 7.50%.
If a senior citizen invests Rs 1,00,000:
- A 1-year FD would grow to Rs 1,07,300
- A 3-year FD would return Rs 1,23,364.98
BoB offers some of the most attractive rates for certain tenures. A 1-year deposit stands at 7.35%, slightly better than SBI’s. The bank shines particularly in the 3-year segment, offering a higher 7.65% interest rate, which can be ideal for those planning to hold their funds for a few years. For both 5-year and 10-year deposits, BoB offers 7.40% and 7.50% respectively.
Returns on a Rs 1,00,000 investment would be
- Rs 1,07,350 after 1 year
- Rs 1,24,750.44 after 3 years
HDFC Bank offers consistent returns across all major tenures, making it a steady option for conservative investors. The bank gives 7.10% on 1-year deposits, while 3, 5, and 10-year deposits all earn 7.50%.
A senior citizen investing Rs 1,00,000 could expect
- Rs 1,07,100 after 1 year
- Rs 1,24,229.69 after 3 years
- Rs 1,43,562.93 after 5 years
To qualify for a senior citizen fixed deposit, an individual must be aged 60 or above. Most banks have specific FD schemes offering better interest rates for this age group, aimed at enhancing financial security during retirement years.
Documents Required to Open an FD Account
Senior citizens looking to open an FD will typically need the following
- A filled application form
- PAN Card
- Recent passport-sized photograph
- KYC documents (Aadhaar, voter ID, passport, or driving licence)
- Form 15H or a self-declaration form for tax exemption, if applicable
Fixed deposits offer tax benefits, especially for senior citizens. Interest earned is taxable, but individuals over 60 can claim deductions under Section 80TTB of the Income Tax Act, which allows for a deduction of up to Rs 50,000 annually on interest income from FDs, savings accounts, or recurring deposits.
Making the Right Choice
When selecting a bank for fixed deposit investment, senior citizens should evaluate more than just the interest rates. Factors like convenience, customer service, tenure flexibility, early withdrawal penalties, and digital services also play an important role. For example, BoB may offer higher 3-year returns, but HDFC provides consistent interest across multiple tenures. SBI, meanwhile, remains a safe choice for those seeking nationalised bank trust and reach.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult with a financial adviser or bank representative before making any investment decision. FD rates may vary and are subject to change.