FD Interest Rates Comparison 2026
Best Fixed Deposit Rates in India
About Fixed Deposits
A Fixed Deposit (FD) is a low-risk, fixed-income instrument where you deposit a lump sum with a bank for a predetermined tenure at a guaranteed interest rate. Your principal and interest are not subject to market risk, making FDs a staple of conservative portfolios.
- DICGC Insurance: All bank FDs are insured up to ₹5 lakh per bank per depositor (principal + interest combined) by the Deposit Insurance and Credit Guarantee Corporation, a subsidiary of RBI. Amounts above ₹5 lakh are not insured.
- Small Finance Banks (SFBs): SFBs like Ujjivan and Suryoday offer higher interest rates than large commercial banks. They are RBI-regulated and DICGC-insured, but carry marginally higher credit risk. Keep deposits within the ₹5 lakh insured limit if using SFBs.
- Senior Citizens: Most banks offer 0.25%–0.50% additional interest p.a. for depositors aged 60 and above. This benefit applies automatically on submission of age proof.
- Compounding frequency: Interest is usually compounded quarterly. The effective yield is slightly higher than the stated p.a. rate because of quarterly compounding.
Regular FD Rates (% p.a., April 2026)
Click any column header to sort. Rates are for general public (non-senior citizen). Senior citizen bonus shown separately.
| Bank | Type | 1 Year | 2 Years | 3 Years | 5 Years | Sr. Citizen Bonus | Min Deposit |
|---|---|---|---|---|---|---|---|
| SBI Trusted | Public Sector | 6.80% | 7.00% | 6.75% | 6.50% | +0.50% | ₹1,000 |
| HDFC Bank | Private | 7.10% | 7.00% | 7.00% | 7.00% | +0.50% | ₹5,000 |
| ICICI Bank | Private | 7.10% | 7.00% | 7.00% | 6.90% | +0.50% | ₹10,000 |
| Axis Bank | Private | 7.10% | 7.10% | 7.10% | 7.00% | +0.50% | ₹5,000 |
| Kotak Mahindra Best Rate (Private, 1yr) | Private | 7.40% | 7.25% | 7.25% | 6.20% | +0.40% | ₹5,000 |
| Bank of Baroda | Public Sector | 7.15% | 7.15% | 7.15% | 6.50% | +0.50% | ₹1,000 |
| Punjab National Bank | Public Sector | 6.80% | 7.00% | 7.00% | 6.50% | +0.50% | ₹1,000 |
| Yes Bank | Private | 7.75% | 7.75% | 7.50% | 7.25% | +0.50% | ₹10,000 |
| IDFC First Bank | Private SFB | 7.90% | 7.75% | 7.75% | 7.25% | +0.50% | ₹10,000 |
| Ujjivan SFB Popular | Small Finance | 8.25% | 8.00% | 8.00% | 7.20% | +0.50% | ₹1,000 |
| Suryoday SFB Highest Rate | Small Finance | 8.60% | 8.25% | 8.25% | 7.75% | +0.50% | ₹1,000 |
* Suryoday & Ujjivan are Small Finance Banks — DICGC-insured up to ₹5 lakh per depositor. Higher rates come with marginally higher credit risk vs. large commercial banks. Keep deposits within insured limits.
How to Choose an FD
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1Safety First — DICGC Cover & Bank Rating Large public sector banks (SBI, Bank of Baroda, PNB) carry implicit government backing. Private banks are well-regulated. Small Finance Banks offer higher rates but have a shorter operating history. Regardless of bank type, keep any single bank FD within ₹5 lakh (principal + expected interest at maturity) to stay fully within DICGC insurance cover. For amounts above ₹5 lakh, spread across multiple banks.
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2Rate — Compare Across Tenures The best rate for a 1-year tenure may not be the same bank offering the best 3-year rate. Always compare the specific tenure you need. Use the table above sorted by the tenure column relevant to you.
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3Tenure — Match to Your Goal FD tenure should align with when you will need the money. Short-term (1 year or less) for emergency reserve top-ups; medium-term (2–3 years) for planned expenses; long-term (5 years) for tax-saving FDs (Section 80C, lock-in). Do not lock in for 5 years if there is any chance you will need the funds earlier.
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4Premature Withdrawal Penalty Most banks levy a 0.5%–1.0% penalty on the applicable rate if you break an FD before maturity. For example, if you break a 3-year FD after 1 year, the bank applies the 1-year rate minus the penalty. Tax-saving FDs (5-year lock-in) cannot be broken prematurely at all. Check the bank's penalty clause before locking in.
FD vs Alternatives — Quick Comparison
| Feature | Fixed Deposit | Debt Mutual Fund | PPF | Recurring Deposit |
|---|---|---|---|---|
| Returns (indicative) | 6.5%–8.6% p.a. | 6%–8% p.a. | 7.1% p.a. (govt-set) | 6.5%–8% p.a. |
| Capital Safety | Very High (DICGC up to ₹5L) | Moderate (NAV-based) | Very High (sovereign) | Very High (DICGC up to ₹5L) |
| Liquidity | Moderate (penalty on early exit) | High (T+1/T+2 redemption) | Low (15-yr lock; partial after 7 yrs) | Moderate (penalty on early exit) |
| Tax on Returns | As per income tax slab | Slab rate on all gains (no indexation, no LTCG benefit post Apr 2023) | Fully tax-exempt | As per income tax slab |
| Best For | Lump sum parking, short–medium term | Flexible short–medium term | Long-term, tax-free compounding | Monthly saving habit, medium term |
Tax on FD Returns
TDS Threshold: Banks deduct Tax Deducted at Source (TDS) at 10% if the total FD interest credited in a financial year exceeds ₹40,000 (for general public) or ₹50,000 (for senior citizens aged 60+).
Applicable Tax Rate: FD interest is added to your total income and taxed at your applicable income tax slab rate — not a flat rate. If you are in the 30% slab, TDS at 10% is just an advance; the remaining 20% is payable at filing.
Form 15G / 15H: If your total annual income is below the basic exemption limit (₹3 lakh for old regime; ₹4 lakh for new regime in FY 2025-26) or you are not liable to pay tax, submit Form 15G (below 60 years) or Form 15H (senior citizens) to your bank at the start of each financial year. This instructs the bank not to deduct TDS on your FD interest.
Interest income declaration: Even if TDS is not deducted (e.g., after Form 15G), the interest income must still be declared in your Income Tax Return (ITR) under "Income from Other Sources."
Frequently Asked Questions
Every bank deposit — including FDs — is insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5 lakh per depositor per bank (principal + interest combined). If a bank is liquidated or goes under, DICGC pays out the insured amount within 90 days.
If your FD value (principal + accrued interest at maturity) exceeds ₹5 lakh at a single bank, the amount above ₹5 lakh is uninsured. To mitigate this, spread large deposits across multiple banks so each stays within ₹5 lakh.
Small Finance Banks are also DICGC-insured. The insurance coverage is identical — the difference is in the perceived credit risk of the bank, not in the insurance framework.
Yes, most FDs (except tax-saving FDs under Section 80C) can be broken prematurely. The bank applies the rate applicable to the actual duration the deposit was held, and then deducts a premature withdrawal penalty of 0.50%–1.00% from that rate.
Example: You open a 3-year FD at 7.25%. If you break it after 14 months, the bank applies the 1-year rate (say 7.10%) minus the penalty (0.50%) = 6.60% effective for 14 months.
Tip: Use a sweep-in FD or a liquid FD linked to your savings account for funds that you might need on short notice — these have zero or negligible premature withdrawal penalties.
It depends entirely on your goal, timeline, and risk tolerance:
- FD is better if you need capital safety, a guaranteed return, and a specific maturity date. Emergency funds, near-term goals (within 2–3 years), and conservative investors belong here.
- Equity mutual funds are better for long-term wealth creation (7+ years). Historical Nifty 50 CAGR is ~13–14%. Over 15–20 years, equity far outpaces FD returns — but it comes with significant short-term volatility.
- Debt mutual funds are a middle ground: more liquid than FDs, similar returns, but no guaranteed rate and taxed as income (same as FDs now, post-April 2023 tax change).
The right answer for most investors is both: FDs for stability and near-term needs; equity mutual funds (index funds, specifically) for long-term compounding.