If you are a senior citizen and want secure and regular income on your savings, then you have many good options in 2026. Fixed deposit (FD) schemes of banks and NBFCs are offering annual interest ranging from 2.5% to 8.10%. At the same time, government-backed schemes like Senior Citizen Savings Scheme (SCSS) and Post Office Monthly Income Scheme (POMIS) are also giving attractive returns.
Senior citizens get additional interest
Most banks offer 0.50% (50 basis points) more interest than normal FD rates to senior citizens aged 60 years and above. Some banks are also offering 0.20% to 0.30% additional interest on special tenure FDs.
Better returns in private and small finance banks
Private banks like SBM Bank, RBL Bank, Bandhan Bank and IndusInd Bank and institutions like AU Small Finance Bank, Jana Small Finance Bank, Suryoday Small Finance Bank and Ujjivan Small Finance Bank are offering more than 7% interest to senior citizens.
For this reason, FD remains a preferred investment option for those retired people who want assured returns while staying away from market fluctuations.
Who is paying the highest interest in government banks?
Among public sector banks, Bank of India is giving interest up to 7.45% to senior citizens. After this, Indian Bank is offering interest up to 7.30% and Punjab and Sindh Bank is offering interest up to 7.25%.
The country’s largest bank SBI is offering interest up to 6.75% on one year FD and 7.05% on five year FD. Whereas Bank of Baroda, Canara Bank, Indian Overseas Bank and Punjab National Bank are offering interest ranging from 7% to 7.10% for select periods.
SCSS is getting 8.2% interest
Senior Citizen Savings Scheme (SCSS) remains one of the most attractive options for senior citizens who prioritize security and regular income.
Currently, this scheme is offering 8.2% annual interest, which is paid every quarter. Its duration is 5 years, which can be extended by 3 more years. A maximum of Rs 30 lakh can be invested in this.
Investing in this scheme also provides the benefit of tax exemption under Section 80C of the Income Tax Act, although the interest income remains taxable.
POMIS option if you want income every month
Post Office Monthly Income Scheme (POMIS) is currently giving 7.4% annual interest. Its specialty is that interest is paid every month.
In this scheme, up to Rs 9 lakh can be invested in a single account and up to Rs 15 lakh can be invested in a joint account. Premature withdrawal facility is also available after one year, although some penalty may have to be paid for this.
Post office time deposit is also an option
Post Office Time Deposit offers fixed returns of 6.9% to 7.5% for a tenure of 1 to 5 years. However, senior citizens are not given the benefit of additional interest in this scheme. The benefit of tax exemption under Section 80C is also available on time deposits of five years.
Financial experts say that choosing the right investment for senior citizens depends on their cash requirement, need for regular income and investment period. At present, in the environment of increased interest rates, they have many options with safe and better returns.
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