If you’re a senior citizen, June 2025 offers one of the best opportunities in years to lock in high fixed deposit (FD) rates. Despite recent repo rate cuts by the Reserve Bank of India (RBI), several banks are still offering interest rates close to 9%. This could be the last window for retirees to secure strong returns for the next few years.

Small Finance Banks Offering the Highest FD Rates

Some of the best rates right now are coming from small finance banks. Unity Small Finance Bank leads the pack, offering an impressive 9.10% interest rate for senior citizens on a 1001-day FD. Close behind are North East Small Finance Bank and Suryoday Small Finance Bank, giving 9% and 8.80% respectively. These are medium-term deposits (just under 3 years) and ideal for those looking for both high returns and access to funds within a reasonable timeframe. The rates apply for deposits up to ₹3 crore.

Public Sector Banks: Stable and Safe

For those who prefer to bank with government-backed institutions, public sector banks are still competitive. Bank of Maharashtra is offering up to 7.95% on specific mid-term FDs. Punjab & Sind Bank and Union Bank of India follow closely, giving rates of up to 7.75% for tenures between 400 and 555 days. While not as high as private or small banks, these rates are appealing due to the perceived safety of public sector banks.

Private Banks Still in the Game

Some private banks are also offering attractive rates. YES Bank has raised its senior citizen FD rates to 7.85% for 3 to 5-year tenures. DCB Bank and RBL Bank are providing over 8% on selected maturity periods. These banks are a preferred choice for many urban retirees who want a balance between a strong interest rate and a known brand.

Why You Should Act Now

The RBI has already cut the repo rate by 50 basis points this year, and more reductions could follow. While banks are gradually adjusting their FD rates, experts suggest that now is the right time to lock in your funds at higher rates before they start falling across the board.

FD interest is fixed for the entire duration of the deposit. That means even if rates drop later, your returns are secured for the chosen tenure. This makes FDs a great tool for retirees who want stable income without risk.

Best FD Tenure for Retirees

Mid-term FDs – typically between 1 to 2 years – are currently offering the highest interest rates across most banks. They strike the right balance between liquidity and yield, making them ideal for senior citizens who need occasional access to funds without compromising much on returns.

Don’t Miss This Golden Window

With FD rates at their peak and the possibility of further rate cuts by the RBI, June 2025 could be your last chance to lock in 9% returns for the next few years. Whether you choose a small finance bank for high interest, or a public sector bank for trust and safety, this is the time to align your investment strategy with your retirement goals.