Quick answer: Compare dated official FD rate schedules for your own deposit amount, tenure and age before booking. The headline rate a bank advertises often applies only to one special tenure or to senior citizens, and rates change without notice — so treat any undated ranking, including ones you find online, as a starting point for checking rather than as a current offer.
Highest FD rates right now
Current bank rates were not independently confirmed for this table. Check a dated official rate schedule before booking.
What the categories mean for you
- Small finance banks: highest rates, roughly 7.50% to 8.25% for general depositors. They are RBI-licensed scheduled banks and deposits are DICGC-insured up to ₹5 lakh per depositor per bank, principal and interest included. Keep each bank under that limit.
- Private banks: roughly 6.00% to 7.45%. Better apps and branch networks, slightly lower rates.
- Public sector banks: roughly 5.00% to 7.25%. Lowest rates, widest reach, highest perceived safety.
- Seniors: most banks pay seniors a higher rate, and several run additional schemes for older depositors, including extra points for those over 80. The amount, the eligible age and the qualifying tenure all differ by bank, so check the bank’s own current rate schedule rather than a general figure.
Illustrative five-year maturity values with quarterly compounding, before tax
| Deposit | Rate | Tenure | Approx. maturity value |
|---|---|---|---|
| ₹5,00,000 | 6.45% (illustrative lower rate) | 5 years | ₹6,88,000 |
| ₹5,00,000 | 7.40% (illustrative mid rate) | 5 years | ₹7,21,000 |
| ₹5,00,000 | 8.25% (illustrative higher rate) | 5 years | ₹7,52,000 |
| ₹10,00,000 | 6.45% | 5 years | ₹13,76,000 |
| ₹10,00,000 | 8.25% | 5 years | ₹15,04,000 |
On ₹10 lakh over five years, the gap between a large public bank and a small finance bank is well over ₹1 lakh. That is the case for shopping around, as long as you stay within the ₹5 lakh insurance limit per bank.
Tax: the part people forget
- FD interest is fully taxable as “Income from Other Sources” at your slab rate.
- Banks deduct 10% TDS once interest across all branches crosses ₹50,000 in a year for general depositors and ₹1,00,000 for senior citizens under the revised thresholds. TDS is not the final tax; you still pay the difference at your slab.
- Use the declaration applicable to your tax year only if you meet its eligibility conditions; low total income alone is not a complete eligibility test.
- Seniors can claim a deduction on interest income under Section 80TTB, which makes FDs more attractive after tax for retirees.
- In the 30% bracket, an 8.25% FD returns roughly 5.8% after tax; compare that against debt funds and PPF before locking a large amount.
How to pick the right FD
- Decide the tenure first. Do not lock money you may need; premature withdrawal costs 0.5% to 1% of the rate.
- Split large amounts across banks so each stays under the ₹5 lakh DICGC cover.
- Look for special tenure schemes (444 days, 501 days, 666 days). The peak rate is often on an odd tenure, not on a round number of years.
- Choose cumulative if you do not need the income, so interest compounds; choose monthly payout if you are living off it.
- Set up auto-renewal carefully. Renewal happens at the rate on that day, which may be much lower.
- For a 5-year tax-saving FD under Section 80C, remember the money is fully locked and premature withdrawal is not allowed at all.
Frequently asked questions
Are small finance bank FDs safe?
Deposit insurance does not make every bank’s risk or access-to-money profile identical. Check the insurance scope and avoid leaving uninsured balances unintentionally.
Which tenure gives the highest rate?
Usually a special short tenure between 400 and 700 days, or 5 years at small finance banks. The highest rate is rarely on a plain 1-year deposit.
Can I get a loan against my FD?
Yes, most banks lend up to 90% of the FD value at about 1% to 2% above the FD rate. It is usually cheaper than breaking the deposit.
Do FD rates change after I book?
No. The rate is locked for the full tenure. Only floating-rate schemes linked to the repo rate move.
Last updated September 2026. Rates are indicative peaks compiled from bank disclosures and aggregator data for deposits below ₹3 crore, and change frequently. Always confirm on the bank’s official page before investing. This is general information, not investment advice.
Sources
For the current official position, check Reserve Bank of India, DICGC — deposit insurance cover. Fees, rates and rules change without notice, and figures in this article are illustrative unless a source is cited beside them.
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