Indian Overseas Bank Senior Citizen FD Rates 2025

What is an Indian Overseas Bank Fixed Deposit?

The Indian Overseas Bank Senior Citizen FD scheme is designed for individuals aged 60 years and above. Investors can choose from flexible interest payout options, monthly, quarterly, half-yearly, or cumulative at maturity, based on their financial preferences. Explore the latest Indian Overseas Bank FD rates, key features, and the process to open a senior citizen FD account.

Key Benefits of Indian Overseas Bank Senior Citizen FD

The Indian Overseas Bank (IOB) offers a range of attractive benefits for senior citizens, providing a secure way to save money. Here are some of the top benefits:

1. Easy Liquidity with Sweep-in/Sweep-out: 

   IOB's Freedom Savings Account automatically transfers balances exceeding ₹50,000 into fixed deposits in multiples of ₹5,000. This scheme ensures that extra funds earn higher interest while the sweep-out facility maintains liquidity for withdrawals.

2. Option to Save on Taxes: 

   Senior citizens can invest in IOB's Tax-Saving Fixed Deposit and avail tax benefits under Section 80C of the Income Tax Act. This provision allows for tax deductions of up to ₹1.5 lakh annually.

3. Options for Flexible Terms: 

   IOB offers flexible deposit tenures ranging from 7 days to 10 years. This allows senior citizens to choose a term that aligns with their financial goals and cash flow requirements.

4. Foreclosure Facility: 

   Premature withdrawal is allowed on senior citizen fixed deposits. No penalty is charged for withdrawals up to ₹15,000. For amounts above ₹15,000, a nominal penalty of up to 1% may apply on the applicable interest rate. This facility ensures that funds remain accessible during emergencies, with minimal impact on returns.

Indian Overseas Bank FD Rates for Senior Citizens 

Here are the Indian Overseas Bank FD interest rates for senior citizens for different types of accounts with different terms:

Indian Overseas Bank senior citizen FD rates for Deposits Below ₹3 Crores (Callable)

*Indian Overseas Bank FD interest rates w.e.f. June 12, 2025

Note: Always compare the FD interest rates offered by the best Indian banks to find the one that best fits your needs and goals.

How to Open an Indian Overseas Bank Senior Citizen FD?

Opening an Indian Overseas Bank (IOB) Fixed Deposit is simple and can be done online or offline.

1. Online Method

   Follow these procedures to open an Indian Overseas Bank FD online: 

   Net Banking:

   • Log in to your IOB NetBanking account.
   • Go to “Deposit” and select “Open Deposit.”
   • Fill in the deposit amount, tenure, and nominee details.
   • After reviewing the details, confirm your FD booking. 

   Mobile App (IOB App):

   • Download the IOB Mobile Banking app from your app store.
   • Log in and navigate to “Save” → “Deposit” → “Open Fixed Deposit.”
   • Enter deposit details, select the nominee, and review.
   • Confirm to complete the FD booking.

2. Offline Method

   Indian Overseas Bank FD account opening instructions offline: 

   • Visit the nearest IOB branch.
   • Please collect and complete the Fixed Deposit application form.
   • Provide KYC documents (ID and address proof), photos, and account details.
   • Choose your deposit tenure and interest payout option.
   • Please submit the form along with cash or a cheque.
   • You will receive an FD receipt and confirmation once the deposit is created.

Taxation on Indian Overseas Bank Senior Citizen FD Interest

Interest earned on Indian Overseas Bank (IOB) Senior Citizen FDs is taxable. It is added to your total income and taxed as per your applicable slab under the Income Tax Act. TDS is deducted at 10% if the annual interest exceeds ₹1 lakh for senior citizens. If a valid PAN is not provided, TDS is charged at 20%. You can submit Form 15H to avoid TDS if your income is below the taxable threshold. Under Section 80TTB, senior citizens can claim a deduction of up to ₹50,000 on interest income. Tax-saving FDs also qualify for Section 80C deductions, but the interest earned remains taxable.

Key Takeaways

Indian Overseas Bank offers senior citizens fixed deposit interest rates of up to 7.60% per annum. These rates are higher than those offered to regular customers. Senior citizens can choose tenures ranging from 7 days to 10 years, based on their financial goals. FDs can be opened online or at a branch with minimal documentation. Those investing in tax-saving FDs can claim deductions under Section 80C, up to ₹1.5 lakh per financial year. An overdraft facility is available, allowing access to funds without closing the FD early.