8.3% FD for Seniors: Is Your ₹5L Deposit Safe?

Some small finance banks are offering up to 8.3% FD rates for senior citizens on 3-year deposits. The returns are attractive, but deposits are insured only up to ₹5 lakh. Here's what seniors and their families need to know before investing.

Here's what happened: Select small finance banks are currently offering FD rates up to 8.3% per annum for senior citizens on 3-year tenures — well above rates from large public or private sector banks.. All bank deposits in India are insured only up to ₹5 lakh per depositor per bank under DICGC cover, which means amounts above this carry risk if a bank fails.. TDS is deducted on FD interest if it exceeds ₹1 lakh in a financial year for senior citizens, but submitting Form 15H can prevent deduction for those with income below the taxable limit..

What you should do: Compare FD rates across at least 3 small finance banks (like Unity SFB, Suryoday SFB, ESAF SFB) on their official websites before committing any funds.. Keep each deposit at or below ₹5 lakh per bank to stay fully within DICGC insurance coverage — spread larger amounts across multiple banks if needed.. Submit Form 15H at the start of every financial year to your bank if your total income is below the taxable threshold, so TDS is not deducted on your FD interest..

Split deposits between a small finance bank (for higher rate) and a PSU bank (for safety) — you get better blended returns without putting all your savings at risk.