In 2025, the Reserve Bank of India (RBI) has so far cut its repo rate by a total of 0.50% (50 basis points) in two policy meetings in February and April. The repo rate is the rate at which the RBI lends money to commercial banks in the country. These two rate cuts have resulted in little softening of a high interest rate regime in the country, with all big and small banks lowering their rates on loans as well as on fixed deposits (FDs).
As a normal practice, when banks get money at a cheaper rate, they also reduce their interest rates. This is what has happened after the RBI rate cuts — borrowers benefited from this. But at the same time those who have parked their money in term deposits or savings accounts are seeing banks lowering rates, hitting their FD income as well as savings account deposit rates.
Also read: SBI special FD scheme returns: Know how much interest you can earn now
Although most public and private banks have cut their FD interest rates drastically, some small finance banks are still offering great interest rates of up to 9.10% to senior citizens.
Here are some small finance banks that are still offering up to 9.10% rates on FD plans for senior citizens
The data is taken from the respective bank’s website as on 24th April 2025. Highest FD rates are considered for callable and amount less than Rs 3 crore.
Are small finance banks safe?
This question comes to the mind of many investors that when small banks are paying high interest, is it safe to invest in them?
The answer is — yes, small finance banks are also safe. The question keeps coming with regard to safety of money in these banks because of the susceptibility of these lenders against financial challenges and regulatory scrutiny. Also small finance banks are usually newer establishments and have less robust financial health compared to their large peers.
These banks, however, are also regulated by RBI, just like big government or private banks. All the necessary conditions like Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR) also apply to them.
Also read: Why now is an opportune time to invest in bank FDs for the stability of your portfolio
Apart from this, your deposits in these banks also come with a guarantee of up to Rs 5 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC). This means that even in case of any untoward incident, the amount up to Rs 5 lakh remains safe.
If you are a senior citizen and want a safe and good return, then FDs of small finance banks can be a great option for you—just check the credibility of the bank while choosing it.