FD Interest Rates July, 2025: A lot of banks have been cutting down on the interest rates for Fixed Deposits for quite some time now. This is a headache for most seniors, since they like to keep most of their investments in fixed deposits. But they do not need to worry for now as there are some banks that are still offering upto 8.8 percent return on FD’s.Public Sector Banks -If you are looking to make a fixed deposit at a government bank, then they also have good rates for senior citizens as well. These banks are considered safe in terms of trust and security, and while their rates may be lower than private or small finance banks, they are still higher than other government and public sector banks.BankMaximum Interest Rate (%)Punjab And Sind Bank7.55%bank of india7.50%Central Bank Of India7.50%Indian Overseas Bank7.45%Indian Bank7.40%Private Sector Banks-As is the case with public sector banks, rates offered by private sector are usually higher and they have variety of flexible tenure options. A senior citizen can avail interest rates upto 7.90% at certain other places, specially like SBM Bank.Bank Maximum Interest Rate (%) SBM Bank 8.55% Bandhan Bank 7.90% CSB Bank 7.90% DCB Bank 7.90% RBL Bank 7.80% Small Finance Bank If you are willing to take some risk in order to earn higher returns, then small finance banks can be a wonderful option. These banks, such as Suryoday Bank and Utkarsh Bank, are offering these higher rates of 8.80% and 8.75%, especially for senior citizens. Bank Maximum Interest Rate (%) Suryoday Small Finance Bank 8.80% Utkarsh Small Finance Bank 8.75% Shivalik Small Finance Bank 8.55% Slice Small Finance Bank 8.50% Fincare Small Finance Bank 8.25% RBI reduced the repo rate So far in 2025, the Reserve Bank of India (RBI) has cut the repo rate by a total of 100 basis points (1%). When rate cuts are made, such as in the case of lending to banks at a cheaper rate, banks tend to make their loans and other rates cheaper. But in the case of federally insured deposits, there is a negative effect on the rate of interest offered, as there is no reason to collect funds from depositors at a premium.Relief to senior elderly regarding TDS paymentIn the 2025 budget, elderly people received a significant relief in TDS payment. Effective from April 1, 2025, banks will only deduct TDS when the aggregate annual interest earned on Fixed Deposits (FDs) exceeds ₹ 1 lakh. The previous threshold was ₹ 50,000. Additionally, if their total income is lower than ₹ 12 lakh, senior citizens (starting FY 26) will be able to avoid TDS completely by submitting Form 15H to their bank.Investor GuidelinesWith the recent decrease in repo rate, Fixed Deposit continues to be a safe and rewarding investment for seniors. In July 2025, pay attention to current rates and tenure as banks might revise interest rates further. Also, remember to check all banks’ rates before investing.
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