Union Bank FD Rates For Senior Citizens 2026: Complete Guide
In India, Fixed Deposits (FD) continue to be a trusted retirement investment only for Indian senior citizens, which offer stable returns, safety and peace of mind. Union Bank of India strengthens this with his senior citizen FD schemes that are designed for better post-retirement income planning.
From March 2026, Union Bank of India offers FD rates ranging from 3.25% p.a. for short-term deposits to a maximum of 6.80% p.a. for select tenures like 1 year and 400 days. Super senior citizens aged 80 years and above can earn up to 7.05% p.a. These rates are effective from March 05, 2026.1
Here is a comprehensive rate table across short, medium, and long tenures:
Union Bank FD Interest Rate Table For Senior Citizens (2026)
Tenure | Regular Citizen (%) | Senior Citizen (%) | Super Senior Citizen (%) |
| 7 days – 14 days | 3.40 | 3.50 | 3.50 |
| 15 days – 30 days | 3.40 | 3.50 | 3.75 |
| 31 days – 45 days | 3.40 | 3.50 | 4.00 |
| 46 days – 90 days | 4.40 | 4.50 | 4.75 |
| 91 days – 180 days | 4.70 | 5.25 | 5.50 |
| 181 days – less than 1 year | 5.25 | 6.25 | 6.50 |
| 1 year | 6.30 | 6.80 | 7.05 |
| Above 1 year – 400 days | 6.30 | 6.80 | 7.05 |
| 400 days (Special) | 6.30 | 6.80 | 7.05 |
| Above 400 days – 2 years | 6.10 | 6.60 | 6.85 |
| 2 years – 3 years | 6.10 | 6.60 | 6.85 |
| 3 years – 5 years | 6.10 | 6.60 | 6.85 |
| 5 years – 10 years | 6.00 | 6.50 | 6.75 |
| Tax Saver FD (5 years) | 6.00 | 6.50 | 6.75 |
Source: Economic times,2
Additional Rate Benefit Over Regular Customers
Union Bank of India also provides the additional interest benefits for senior citizens on FDs up to INR 5 crore. The age of citizens are 60 79 years as they receive an extra 0.50% p.a. above the regular FD rate.3
Super senior citizens aged 80 years and above get an additional 0.75% p.a., which is 0.25% higher than the standard senior citizen benefit, assisting retirees earn better returns with safety and stability.
Special Senior Citizen FD Schemes At Union Bank
1. Union Samman Deposit
Union Bank’s Union Samman Deposit is a special FD scheme which is designed to offer slightly higher returns on select tenures such as 333, 444, or 997 days. As of 2026, these deposits offer around 6.15%-6.50% p.a. for general citizens.
Senior citizens receive an additional 0.50% interest, while super senior citizens get an extra 0.75% over regular rates. Since these are limited-period schemes, investors should check the latest rates and availability on the Union Bank website or at nearby branches.4
2. SCSS Linkage Options
Union Bank acts as an authorised agent for the Senior Citizens Savings Scheme (SCSS), a government-backed retirement scheme offering 8.20% p.a. for Q1 FY2025-26, it is one of the highest risk-free returns for senior citizens in India.
Senior citizens can open SCSS accounts through Union Bank branches and combine them with regular FDs for better retirement planning. While SCSS allows investments up to INR 30 lakh at higher interest rates, Union Bank FDs can be used for surplus funds or for flexible tenures not available under SCSS.
TDS Rules And Section 80TTB Exemption For Senior Citizens
Tax treatment is a crucial consideration for senior citizens investing in FDs. Here is what you need to know:
TDS Deduction Rules
- For regular citizens: TDS is deducted at 10% if total FD interest income exceeds INR 40,000 in a financial year.
- For senior citizens: The TDS threshold is INR 1,00,000 per financial year, a significantly higher exemption limit.
- If PAN is not provided to the bank, TDS is deducted at 20%, regardless of the amount.5
Section 80TTB Deduction
Under Section 80TTB of the Income Tax Act, 1961, senior citizens (aged 60 and above) can claim a deduction of up to INR 50,000 per financial year on interest income from deposits including FDs, recurring deposits, and savings accounts.
How To Avoid TDS: Submit Form 15H?
Senior citizens whose total income falls below the taxable limit can submit Form 15H to Union Bank at the start of each financial year. This declaration helps avoid TDS deduction on FD interest income, ensuring better monthly cash flow during retirement.
Tax-Saving FD (Section 80C)
Union Bank also offers a 5-year Tax Saver FD allowing deposits up to INR 1.5 lakh per financial year for deduction under Section 80C. Senior citizens receive 6.50% p.a. on this FD. Note that premature withdrawal is not permitted and the interest earned is fully taxable.
How To Open Union Bank FD Online Via Mobile/Net Banking?
Opening a senior citizen FD with Union Bank has never been easier. Existing account holders can complete the process entirely online in under 5 minutes.
Via Vyom Mobile App (Recommended)
- Download and open the Union Bank Vyom App.
- Login with your account details.
- Go to Deposits and select Open Fixed Deposit.
- Enter the FD amount, time period, interest option (monthly, quarterly, or at maturity), and nominee details.
- Check the senior citizen interest rate and submit the request.
- After successful completion, you will receive confirmation through SMS and email.
Via Internet Banking
- Log in to Union Bank Internet Banking.
- Go to Deposits and click on Open Fixed Deposit.
- Enter details like FD amount, time period, and interest payout option.
- Verify the details and confirm using OTP or transaction password.
- Once completed, your FD will be successfully created.
Via Branch (For New Customers)
If you are not an existing Union Bank customer, visit your nearest branch with a PAN card, Aadhaar card, passport-size photographs, and age proof (for senior citizen rate eligibility). Fill out the FD application form, submit KYC documents, and receive your FD receipt upon processing.
Union Bank Senior FD vs Post Office SCSS vs Corporate FD
Choosing the right savings instrument is a decision that should balance returns, safety, liquidity, and tax efficiency. Here is a detailed comparison of three popular options for senior citizens:
| Feature | Union Bank FD | Post Office SCSS | Corporate FD (via Grip) |
| Interest Rate (Senior) | Up to 6.80% p.a. | 8.20% p.a. | Up to 14% p.a. |
| Tenure | 7 days – 10 years | 5 years (extendable) | Varies (1–5 years) |
| Minimum Deposit | INR 1,000 | INR 1,000 | INR 1,000 |
| Maximum Deposit | No limit | INR 30 lakh | No cap |
| Government Backing | Yes (PSU bank) | Yes (GoI) | No |
| DICGC Insurance | Yes (up to INR 5 lakh) | No | No |
| Premature Withdrawal | Yes (1% penalty) | Allowed (penalty) | Varies by issuer |
| Loan Against Deposit | Yes (up to 90%) | Limited | No |
| TDS Threshold (Senior) | INR 1,00,000 p.a. | INR 50,000 p.a. | INR 5,000 p.a. (as per bonds) |
| Section 80TTB Benefit | Yes | Yes | No |
| Risk Level | Very Low | Very Low | Moderate High |
| SEBI Regulated | No (RBI) | No (GoI) | Yes (OBPP) |
Source: ET money,6
Conclusion: The Right FD Strategy For Your Retirement
Union Bank of India FDs remain a trusted retirement option in 2026, offering up to 6.80% p.a., tax benefits under Section 80TTB, and government backed safety. For senior citizens, they provide the right mix of stability, liquidity, and steady income.
For better returns, financially aware retirees may allocate a smaller portion to platforms like Grip Invest, which offer SEBI regulated bonds and high-yield FDs with returns up to 14% p.a., though with higher risk.
A balanced strategy is to keep 70–80% of retirement savings in safe options like Union Bank FDs and SCSS, while investing 20–30% in higher-yield instruments if comfortable with moderate risk. Diversify wisely and consult a financial planner before major decisions.
Grip offers corporate bonds and other fixed-income investment options with yields up to 12.5% and institutional-grade security features. Visit Grip Today!
FAQs ON Union Bank FD Rates
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Author: Grip Invest Editorial Team The Grip Invest Editorial Team is a group of Chartered Accountants, MBA (Finance) graduates, and Qualified Research Analysts dedicated to helping you invest smarter. We dive deep into India's fixed income landscape to deliver content that is accurate, up-to-date, and easy to understand. Whether you're exploring bonds, fixed deposits, or other fixed income opportunities, our guides cut through the noise and give you the clarity to make better financial decisions. |
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