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 based on their financial preferences. The latest FD interest rates are based on the tenure, deposit type, and the category you fall into.

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:

• 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.
• Automatic Renewal Facility: The automatic renewal feature means that upon maturity, your FD is automatically renewed for the same term at the prevailing interest rate unless you provide instructions to the bank beforehand not to renew it.
• 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.
• 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.
• 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 different types of accounts with different tenures:

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

*Indian Overseas Bank FD interest rates w.e.f. August 14, 2025
*Indian Overseas Bank FD interest rates for Super Senior Citizens are 0.75% higher than Senior Citizens.

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

 is deducted at 10% if your annual interest income from the bank exceeds ₹1 lakh.

• If you haven't provided a valid PAN, the TDS rate increases to 20%.
• As a senior citizen, you can claim a deduction of up to ₹50,000 on your interest income from bank FDs, RDs, and savings accounts under Section 80TTB. This helps reduce your taxable income. 
• You can submit Form 15H to the bank to prevent TDS from being deducted if your total income for the financial year is below the basic taxable limit. 
• While a tax-saving FD may offer deductions on the principal amount invested under Section 80C, the interest earned from it is still subject to tax.

Key Takeaways

Indian Overseas Bank FD interest rates for senior citizens are up to 7.70% 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. Those investing in tax-saving FDs can claim deductions under Section 80C, up to ₹1.5 lakh per financial year. An overdraft facility, automatic renewal facility, and foreclosure facility, with easy liquidity with seep-in/sweep-out, are available, which allows access to funds without closing the FD early.