Fixed Deposits (FDs) remain one of the most preferred investment options for senior citizens in India, thanks to their safety, predictable returns, and simple operation. Many financial institutions offer preferential FD rates for senior citizens, allowing retirees to earn higher interest. Among them, Bajaj Finance Fixed Deposit stands out for offering up to 7.30% p.a. for senior citizens (as of 2025), along with a smooth, paperless online application process.
This article explains the tax implications on
FD interest for senior citizens and provides strategies to maximise savings while highlighting the benefits of investing with Bajaj Finance FD.
Understanding Fixed Deposit Interest Rates for Senior Citizens
Senior citizens (aged 60+) usually enjoy 0.25% to 0.75% higher FD interest rates than the general public. As of 2025, Bajaj Finance offers up to 7.30% p.a. for senior citizens, making it one of the most competitive rates in the market.
For example, if a senior citizen invests Rs. 5 lakh for 36 months in a Bajaj Finance FD, they can earn significantly higher interest compared to a regular bank FD.
Tax Implications on FD Interest for Senior Citizens
Interest income from FDs is classified as "Income from Other Sources" and is fully taxable. This means the total interest earned is added to your gross income and taxed according to your income slab.
Although FD returns are guaranteed, the tax on interest can reduce your net earnings—unless you plan strategically.
Section 80TTB: A Valuable Deduction for Seniors
Under Section 80TTB of the Income Tax Act, senior citizens can claim up to 50,000 per year as a deduction on interest earned from:
- Fixed Deposits
- Savings Accounts
- Recurring Deposits
Example: If your total interest income is 70,000 in a year, you can deduct 50,000 under 80TTB, and only 20,000 becomes taxable.
TDS Rules on FD Interest for Senior Citizens
If interest from FDs exceeds 50,000 in a financial year, banks and NBFCs like Bajaj Finance deduct TDS at 10%.
However, if your total income is below the taxable limit, you can submit Form 15H to avoid TDS.
With Bajaj Finance FD, you can do this declaration digitally during your FD booking, making the process hassle-free.
Smart Ways to Save More on FD Interest in 2025
Here are five ways senior citizens can maximise their FD earnings:
Comparing FD Rates: Why Bajaj Finance Stands Out
Bajaj Finance FD for senior citizens offers:
- Interest rates up to 7.30% p.a.
- Flexible tenures from 12 to 60 months
- Auto-renewal and loan against FD facility
- Online account management via Customer Portal
With a AAA rating form CRISIL and ICRA, Bajaj Finance FD ensures high safety and reliability for senior investors.
What About Tax-saving FDs?
Tax saving FD allow deductions up to 1.5 lakh under Section 80C, but they come with a 5-year lock-in and do not permit premature withdrawal.
Note: Bajaj Finance currently does not offer tax-saving FDs under Section 80C.
Alternatives You Can Explore
Apart from FDs, senior citizens may also consider:
- Senior Citizens Savings Scheme (SCSS) – Government-backed, offering quarterly payouts
- Post Office Monthly Income Scheme (POMIS) – Steady monthly income with sovereign guarantee
- Tax-free bonds – Ideal for high-income retirees seeking tax-free interest
However, for those seeking higher rates with flexibility and credibility, Bajaj Finance FD remains a preferred option.
Conclusion
Fixed deposits continue to offer a reliable and secure investment path for senior citizens. By choosing a high-yield FD like Bajaj Finance Fixed Deposit, leveraging Section 80TTB, and filing Form 15H if eligible, retirees can earn more while reducing their tax liability.
Explore the best FD options for 2025 and consider investing in Bajaj Finance Senior Citizen FD to ensure stability, growth, and peace of mind in your golden years.
Book a Bajaj Finance FD now and grow your savings with one of India’s most trusted financial partners.
