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It’s important to be well-informed about Fixed Deposit rates before making any investment decisions. Fixed Deposits are a secure choice for investors, providing a consistent interest rate, offering special rates for senior citizens, and coming with various interest payment options. Moreover, the absence of market risks and the added benefit of income tax deductions make it an even better option for a safe investment.
But before we dive into the specific interest rates offered by top banks in 2025, let’s take a closer look at some important things to consider, which will definitely help you make a well-informed decision when opening a new Fixed Deposit or renewing an existing one.
Top Banks FD Interest Rates in 2025
Let’s take a closer look at what some of the leading banks are offering. This will help you to understand which bank is best for fixed deposits in India in 2025.
| Banks | Highest FD rate (% p.a.) | 1-year FD rate (% p.a.) | 3-year FD rate (% p.a.) | 5-year FD rate (% p.a.) | Additional interest rate for senior citizens (% p.a.) |
|---|---|---|---|---|---|
|
slice Small Finance Bank |
8.50 |
6.75 |
8.25 |
7.75 |
0.50 |
|
Suryoday Small Finance Bank |
8.20 |
7.50 |
7.75 |
8.20 |
0.40 |
|
Jana Small Finance Bank |
8.00 |
7.25 |
7.50 |
8.00 |
0.50 |
|
Shivalik Small Finance Bank |
7.60 |
6 |
7.50 |
6.50 |
0.50 |
|
Equitas Small Finance Bank |
7.60 |
7.25 |
7.25 |
7.00 |
0.50-0.60 |
|
Unity Small Finance Bank |
7.75 |
6.50 |
7.25 |
7.25 |
0.50 |
|
Utkarsh Small Finance Bank |
7.65 |
6.00 |
7.65 |
7.25 |
0.50 |
|
ESAF Small Finance Bank |
7.60 |
4.75 |
6.00 |
5.75 |
0.50 |
|
SBM Bank |
7.50 |
7.05 |
7.05 |
7.50 |
0.50 |
|
Ujjivan Small Finance Bank |
7.45 |
7.25 |
7.20 |
7.20 |
0.50 |
|
Bandhan Bank |
7.30 |
7.10 |
7.00 |
5.85 |
0.50-0.75 |
|
DCB Bank |
7.20 |
6.90 |
7.00 |
7.00 |
0.25-0.50 |
|
RBL Bank |
7.20 |
7.00 |
7.20 |
6.70 |
0.50 |
|
Capital Small Finance Bank |
7.15 |
7.00 |
7.00 |
6.90 |
0.50 |
|
AU Small Finance Bank |
7.10 |
6.35 |
7.10 |
6.75 |
0.50 |
|
Punjab & Sind Bank |
7.05 |
6.10 |
6.00 |
6.35 |
0.50 |
|
YES Bank |
7.00 |
6.65 |
7.00 |
6.75 |
0.50-0.75 |
|
Induslnd Bank |
7.00 |
6.75 |
6.75 |
6.65 |
0.75 |
|
Federal Bank |
6.70 |
6.40 |
6.50 |
6.50 |
0.50
|
|
Bank of India |
6.60 |
6.25 |
6.25 |
6.00 |
0.50 |
Advantages of Fixed Deposits (FDs)
- Assured Returns: FDs offer a secure investment choice with guaranteed returns, regardless of how the economy performs, making it the best choice for cautious investors.
- Flexibility: Offer a range of tenures, from 7 days to 10 years, that gives investors the flexibility to choose a tenure that fits their requirements.
- Tax Benefits: It offers tax benefits under Section 80C of the Income Tax Act, 1961.
- Extra Benefits to Senior Citizens: Banks offer higher interest rates to Senior citizens, compared to the general public, which can benefit Senior citizens during their golden years.
- For All Investors: FDs are suitable for all types of investors, whether you're just starting, prefer low-risk options, or are a senior citizen.
Drawbacks Of Opening A Fixed Deposit Account
- Interest rates on FD accounts are typically lower than other investment options, such as stocks and mutual funds.
- You may have to pay a penalty. If you withdraw your money before the end of the tenure.
How to Open a Fixed Deposit Account?
To open a fixed deposit (FD) account, you can either visit a bank branch or do it online.
If you are visiting a bank branch:
- Fill out the FD application form with the required details.
- Submit the required documents, such as your PAN card, Aadhaar card, and address proof.
- Deposit the amount you want to invest in the FD account.
- The bank will issue a receipt of your FD.
If you are opening a FD account online:
- Log in to your net banking portal with your credentials.
- Click on the option “Open an FD account.”
- Fill out the required details, such as the investment amount, tenure, and nominee details.
- Review the details before submission.
- The bank will open the account for you and send you the details.
Here are some additional things to keep in mind when opening a FD account:
- The minimum investment amount for the FD account varies from bank to bank.
- You can choose a tenure for your account, from a few days to several years.
- You get the fixed interest rate for the entire tenure.
- You can earn higher interest rates on longer tenures.
What Affects Fixed Deposit Interest Rates?
Before you dive into investing in Fixed Deposits, it is very important to understand what influences the interest rates.
- Repo rate: The repo rate is the interest rate at which banks borrow money from the central bank. When the repo rate increases, banks increase their FD rates as well. Conversely, when the repo rate decreases, banks tend to decrease their FD rates.
- Inflation: When inflation is high, banks tend to offer higher FD rates to compensate investors for the loss of purchasing power of their money.
- Investment tenure: Longer the investment tenure, the higher the interest rate that is generally offered because banks can earn more on their investments.
- Investor profile: Senior citizens and other special categories are often offered higher FD rates by banks.
- Investment type: Some banks offer special types of FDs, like tax-saving FDs and cumulative FDs, that may have different interest rates.
- Competition: Another important reason that affects interest rates is competition. Banks compete with each other to attract depositors, and this can also lead to variations in FD rates. Investors should compare FD rates from different banks before opening a Fixed Deposit account.
Happy investing and thank you for reading!
Disclaimer:
This website content is only for educational purposes, not investment advice. Before making any investment, it’s important to do your own research and be fully informed. Investing in the stock market includes risks, and you should carefully read the Risk Disclosure documents before proceeding. Please remember that past performance doesn’t guarantee future results, and due to market fluctuations, your investment goals may not always be achieved.
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