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Fixed Deposit interest for senior citizens, others ahead of Budget: SBI vs Axis Bank vs HDFC Bank
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5 min read | Updated on January 28, 2025, 08:47 IST
SUMMARY
Fixed Deposit news: In a pre-budget report last week, the SBI Research team proposed that the government may tax the income from fixed deposits at a flat rate of 15%. Further, the report also suggested the government should treat the taxation of FD and other term deposits at par with other asset classes.
Currently, fixed deposits in leading banks earn up to 5% to 7.75% annual interest | Image source: Shutterstock
Further, the report also suggested the government should treat the taxation of FD and other term deposits at par with other asset classes.
Currently, FD interest is taxed annually at the highest tax slab applicable to the depositor whereas investments in equity mutual funds are taxed at 20% for short-term gains and at 12.5% for long-term gains.
The SBI Research's proposal, if approved by the government, will boost the popularity of fixed deposits, providing tax relief to depositors, especially senior citizens who rely heavily on FDs to fund their post-retirement lives.
Currently, fixed deposits in leading banks earn up to 5% to 7.75% annual interest on deposits of different terms ranging from 7 days to 10 years.
Here's a look at the FD rates offered by the State Bank of India (SBI), Axis Bank, and HDFC Bank:
SBI FD rates*
| Maturity period | General Public (%) | Senior Citizen (%) |
|---|---|---|
| 180 days to 210 days | 6.25 | 6.75 |
| 211 days to less than 1 year | 6.5 | 7 |
| 1 Year to less than 2 years | 6.8 | 7.3 |
| 2 years to less than 3 years | 7 | 7.5 |
| 3 years to less than 5 years | 6.75 | 7.25 |
| 5 years and up to 10 years | 6.5 | 7.5 |
*Effective from June 15, 2024. Applicable for retail term deposits below ₹3 crore. Source: SBI website
HDFC Bank FD rates*
| Maturity period | General Public (%) | Senior Citizen (%) |
|---|---|---|
| 6 months 1 days < = 9 months | 5.75% | 6.25% |
| 9 months 1 day to < 1 year | 6.00% | 6.50% |
| 1 year to < 15 months | 6.60% | 7.10% |
| 15 months to < 18 months | 7.10% | 7.60% |
| 18 months to < 21 months | 7.25% | 7.75% |
| 21 months - 2 years | 7.00% | 7.50% |
| 2 Years 1 day to < 2 Year 11 Months | 7.00% | 7.50% |
| 2 Years 11 Months - 35 Months | 7.35% | 7.85% |
| 2 Years 11 Months 1 day < = 3 Year | 7.00% | 7.50% |
| 3 Years 1 day to < 4 Years 7 Months | 7.00% | 7.50% |
| 4 Year 7 Months - 55 months | 7.40% | 7.90% |
| 4 Year 7 Months 1 day < = 5 Years | 7.00% | 7.50% |
| 5 Years 1 day - 10 Years | 7.00% | 7.50% |
*Effective from 24th July, 2024. Applicable for retail term deposits below ₹3 crore. Senior Citizen Rates do not apply to NRIs. Source: HDFC Bank website.
Axis Bank FD rates*
| Maturity period | General Public (%) | Senior Citizen (%) |
|---|---|---|
| 6 months < 7 months | 5.75 | 6.25 |
| 7 months < 8 months | 5.75 | 6.25 |
| 8 months < 9 months | 5.75 | 6.25 |
| 9 months < 10 months | 6 | 6.5 |
| 10 months < 11 months | 6 | 6.5 |
| 11 months – 11 months 24 days | 6 | 6.5 |
| 11 months 25 days < 1 year | 6 | 6.5 |
| 1 year – 1 year 4 days | 6.7 | 7.2 |
| 1 year 5 days – 1 year 10 days | 6.7 | 7.2 |
| 1 year 11 days – 1 year 24 days | 6.7 | 7.2 |
| 1 year 25 days < 13 months | 6.7 | 7.2 |
| 13 months < 14 months | 6.7 | 7.2 |
| 14 months < 15 months | 6.7 | 7.2 |
| 15 months < 16 months | 7.25 | 7.75 |
| 16 months < 17 months | 7.25 | 7.75 |
| 17 months < 18 months | 7.25 | 7.75 |
| 18 Months < 2 years | 7.25 | 7.75 |
| 2 years < 30 months | 7.1 | 7.6 |
| 30 months < 3 years | 7.1 | 7.6 |
| 3 years < 5 years | 7.1 | 7.6 |
| 5 years to 10 years | 7 | 7.75 |
*Effective from January 27, 2025. Applicable for retail term deposits below ₹3 crore. Source: Axis Bank website
Finance Minister Nirmala Sitharaman will present Budget 2025 speech on February 1, 2025. Please note that any change in FD taxation will be confirmed only by the finance minister in her budget presentation.
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