In today’s dynamic financial landscape, fixed deposits remain a cornerstone of secure investment. With interest rates showing significant variation across different banking sectors, making an informed choice has never been more crucial. Let’s dive into a detailed analysis of the current FD landscape in India.
Small Finance Banks: The Hidden Champions of High Returns
Small finance banks are emerging as the frontrunners in the FD race, offering substantially higher interest rates compared to traditional banks. North East Small Finance Bank and Unity Small Finance Bank are leading the pack with an impressive 9% interest rate on their highest slabs.
Small Finance Banks Interest Rates
| Bank Name | Highest Slab | 1-year tenure | 3-year tenure | 5-year tenure |
| AU Small Finance Bank | 8 | 7.25 | 7.5 | 7.25 |
| Capital Small Finance Bank Limited | 7.6 | 7.55 | 7.15 | 7.1 |
| Equitas Small Finance Bank | 8.25 | 8.18 | 7.25 | – |
| ESAF Small Finance Bank | 8.25 | 6 | 6.75 | 6.25 |
| Jana Small Finance Bank | 8.25 | 8.25 | 8.25 | 8.2 |
| North East Small Finance Bank | 9 | 7 | 9 | 6.25 |
| Shivalik Small Finance Bank Limited | 8.36 | 7.5 | – | 6.5 |
| Suryoday Small Finance Bank | 8.6 | 8.05 | 8.6 | 8.25 |
| Ujjivan Small Finance Bank | 8.25 | 8.25 | 7.2 | 7.2 |
| Unity Small Finance Bank | 9 | 7.85 | 8.15 | 8.15 |
| Utkarsh Small Finance Bank | 8.58 | 8.5 | – | 7.75 |
If you’re considering Suryoday Small Finance Bank, check out our detailed review of Suryoday Fixed Deposit offerings for insights into its competitive rates and features.
Private Sector Banks: Stability Meets Competitive Rates
Private sector banks offer a sweet spot between competitive rates and institutional stability. Here’s a detailed look at their current rates:
Private Sector Banks Interest Rates
| Bank Name | Highest Slab | 1-year tenure | 3-year tenure | 5-year tenure |
| Axis Bank | 7.25 | 6.7 | 7.1 | 7 |
| Bandhan Bank | 8.05 | 8.05 | 7.25 | 5.85 |
| City Union Bank | 7.5 | 7 | 6.5 | 6.25 |
| CSB Bank | 7.75 | 5 | 5.75 | 5.75 |
| DBS Bank | 7.57 | 6.5 | – | 6.5 |
| DCB Bank | 8.05 | 7.1 | 7.55 | 7.4 |
| Dhanlaxmi Bank | 7.25 | 6.75 | 6.5 | 7.25 |
| Federal Bank | 7.4 | 6.87 | – | 6.6 |
| HDFC Bank | 7.4 | 6.6 | 7 | 7 |
| ICICI Bank | 7.25 | 6.7 | 7 | 7 |
| IDBI Bank | 7.35 | 6.8 | 6.5 | 6.5 |
| IDFC First Bank | 7.9 | 6.5 | 6.8 | 6.75 |
| IndusInd Bank | 7.99 | 7.75 | 7.25 | 7.25 |
| Jammu & Kashmir Bank | 7 | 7 | 6.75 | 6.5 |
| Karnataka Bank | 7.5 | 7.25 | 6.5 | 6.5 |
| Karur Vysya Bank | 7.6 | 7 | 7 | 7 |
| Kotak Mahindra Bank | 7.4 | 7.1 | 7 | 6.2 |
| Nainital Bank | 7.05 | 6.7 | 6.25 | 5.75 |
| RBL Bank | 8.1 | 7.5 | 7.5 | 7.1 |
| SBM Bank India | 8.25 | 7.05 | 7.3 | 7.75 |
| South Indian Bank | 7.4 | 6.7 | 6.7 | 6 |
| Tamilnad Mercantile Bank | 7.6 | 7 | 6.5 | 6.5 |
| Yes Bank | 7.75 | 7.25 | 7.25 | 7.25 |
Interested in Kotak Mahindra Bank? Our analysis of Mahindra Finance FDs highlights how you can maximize returns with their longer tenure options.
Public Sector Banks: The Safety-First Option
While public sector banks typically offer lower rates, they compensate with unmatched security and government backing.
Public Sector Banks Interest Rates
| Bank Name | Highest Slab | 1-year tenure | 3-year tenure | 5-year tenure |
| Bank of Baroda | 7.3 | 6.85 | 7.15 | 6.8 |
| Bank of India | 7.3 | 6.8 | 6.5 | 6 |
| Bank of Maharashtra | 7.35 | 6.75 | 6.5 | 6.5 |
| Canara Bank | 7.4 | 6.85 | 7.4 | 6.7 |
| Central Bank of India | 7.45 | 6.85 | 6.75 | 6.5 |
| Indian Bank | 7.3 | 6.1 | 6.25 | 6.25 |
| Indian Overseas Bank | 7.3 | 7.1 | 6.5 | 6.5 |
| Punjab & Sind Bank | 7.45 | 6.36 | – | 6 |
| Punjab National Bank | 7.25 | 6.8 | 7 | 6.5 |
| State Bank of India | 7.25 | 6.8 | 6.75 | 6.5 |
| UCO Bank | 7.3 | 6.5 | 6.3 | 6.2 |
| Union Bank of India | 7.3 | 6.8 | 6.7 | 6.5 |
Corporate FD Options: An Alternative Worth Considering
The corporate FD segment offers some compelling alternatives to traditional bank deposits. Check out our detailed analysis of Shriram Finance FDs and Bajaj Finance FDs for more insights.
Corporate Fixed Deposit Rates
Company Name | 1-year tenure | 3-year tenure | 5-year tenure | Tenure range | Additional interest rate for senior citizen (p.a.) |
ICICI Home Finance | 7.25% | 7.75% | 7.75% | 12-120 months | 0.25% |
Kerala Transport Development Finance Corporation | 7.00% | 7.00% | 6.75% | 12-60 months | 0.25% |
LIC Housing Finance Ltd. | 7.25% | 7.75% | 7.75% | 12-60 months | 0.25% |
Mahindra Finance | 7.50% | 8.10% | 8.10% | 12-60 months | 0.10%-0.25% |
Manipal Housing Finance Syndicate Ltd. | 8.25% | 8.25% | 7.75% | 12-60 months | 0.25% |
Muthoot Capital Services Limited | 7.21% | 8.07% | 8.38% | 12-60 months | 0.50% |
PNB Housing Finance Ltd. | 7.45% | 7.75% | 7.60% | 12-120 months | 0.20%-0.30% |
Shriram Finance Ltd. | 7.59% | 8.38% | 8.47% | 12-60 months | 0.50% |
Sundaram Home Finance | 7.45% | 7.75% | 7.90% | 12-60 months | 0.35%-0.50% |
Sundaram Finance | 7.45% | 7.75% | – | 12-36 months | 0.35%-0.50% |
Making Your Decision: Factors to Consider
- Investment Horizon: Match your investment tenure with your financial goals. Longer tenures generally offer higher rates.
- Safety vs Returns: While small finance banks offer higher rates, traditional banks provide better stability.
- Liquidity Needs: Consider the penalty charges for premature withdrawal before locking in for longer tenures.
- Senior Citizen Benefits: Corporate FDs like Muthoot Capital Services and Shriram Finance offer additional 0.50% for senior citizens.
The Bottom Line
In the current interest rate environment, small finance banks and corporate FDs are offering the most attractive rates. However, the choice should align with your risk appetite and financial goals. For those prioritizing safety, private and public sector banks remain solid options, albeit with lower returns.
Remember that interest rates are subject to change, and it’s advisable to check the latest rates directly with the financial institutions before making an investment decision.
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Last updated: January 2025 All rates mentioned are subject to change as per the respective financial institutions’ policies.
