Currently, among all bank categories, Unity Small Finance Bank offers the best FD rate at 9.00% p.a., followed by Suryoday Small Finance Bank, which offers fixed deposit at 8.60% p.a. Fincare Small Finance Bank also offers one of the highest FD interest rates in India at 8.51% p.a., closely followed by Equitas Small Finance Bank, ESAF Small Finance Bank, Jana Small Finance Bank, Utkarsh Small Finance Bank and North East Small Finance Bank offering FDs at 8.50% p.a.
Among the private sector banks, SBM Bank, Bandhan Bank, RBL Bank, DCB Bank and Yes Bank offer yields exceeding 7.50% p.a. Here is the list of best FD interest rates offered by various banks and NBFCs according to their categories.
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Best FD Interest Rates 2023
| Bank Name | Interest Rates (p.a.) | |||
| Highest slab (%) | 1-year tenure (%) | 3-year tenure (%) | 5-year tenure (%) | |
| Unity Small Finance Bank | 9.00 | 7.35 | 7.65 | 7.65 |
| Suryoday Small Finance Bank | 8.60 | 6.85 | 8.60 | 8.25 |
| Fincare Small Finance Bank | 8.51 | 7.50 | 8.00 | 8.00 |
| Equitas Small Finance Bank | 8.50 | 8.20 | 8.00 | 7.25 |
| ESAF Small Finance Bank | 8.50 | 6.00 | 6.75 | 6.25 |
| Jana Small Finance Bank | 8.50 | 8.00 | 8.50 | 7.25 |
| North East Small Finance Bank | 8.50 | 7.00 | 7.75 | 6.25 |
| Utkarsh Small Finance Bank | 8.50 | 8.00 | 8.50 | 7.50 |
| Ujjivan Small Finance Bank | 8.25 | 8.25 | 7.20 | 7.20 |
| SBM Bank | 8.10 | 6.25 | 7.30 | 7.75 |
| Shivalik Small Finance Bank Limited | 8.10 | 8.10 | 8.00 | 7.00 |
| AU Small Finance Bank | 8.00 | 6.75 | 8.00 | 7.25 |
| Bandhan Bank | 7.85 | 7.25 | 7.25 | 5.85 |
| RBL Bank | 7.80 | 7.00 | 7.10 | 7.10 |
| DCB Bank | 7.75 | 7.15 | 7.60 | 7.40 |
| Yes Bank | 7.75 | 7.50 | 7.25 | 7.25 |
| Capital Small Finance Bank Limited | 7.50 | 7.50 | 7.15 | 7.10 |
| DBS Bank | 7.50 |
6.25 |
6.50 |
6.50 |
| IDFC First Bank | 7.50 | 6.50 | 7.25 | 7.00 |
| IndusInd Bank | 7.50 |
7.50 |
7.25 | 7.25 |
Interest rates as of 20 September 2023
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Fixed Deposit Rates offered by Other Private Sector Banks
| Bank Name | Interest Rates (p.a.) | |||
| Highest slab (%) | 1-year tenure (%) | 3-year tenure (%) | 5-year tenure (%) | |
| Karur Vysya Bank | 7.50 | 7.00 | 7.00 | 6.50 |
| CSB Bank | 7.35 | 5.00 | 5.75 | 5.75 |
| Federal Bank | 7.30 | 6.80 | 6.60 | 6.60 |
| Karnataka Bank | 7.30 | 7.00 | 6.50 | 6.50 |
| Dhanlaxmi Bank | 7.25 | 6.75 | 6.50 | 6.60 |
| HDFC Bank | 7.25 |
6.60 | 7.00 | 7.00 |
| Kotak Mahindra Bank | 7.25 | 7.10 | 6.50 | 6.20 |
| South Indian Bank | 7.20 | 6.60 |
6.50 |
6.00 |
| IDBI Bank | 7.15 | 6.80 | 6.50 | 6.50 |
| Axis Bank | 7.10 | 6.70 | 7.10 | 7.00 |
Interest rates as of 20 September 2023
Fixed Deposit Rates offered by Other Public Sector Banks
| Bank Name | Interest Rates (p.a.) | |||
| Highest slab (%) | 1-year tenure (%) | 3-year tenure (%) | 5-year tenure (%) | |
| Punjab and Sind Bank | 7.40 | 6.40 | 6.00 | 6.00 |
| Bank of Baroda | 7.25 | 6.75 | 7.05 | 6.50 |
| Bank of India | 7.25 |
6.00 |
6.50 |
6.00 |
| Canara Bank | 7.25 | 6.90 | 6.80 | 6.70 |
| Indian Bank | 7.25 | 6.10 | 6.25 | 6.25 |
| Indian Overseas Bank | 7.25 | 6.50 | 6.50 | 6.50 |
| Punjab National Bank | 7.25 | 6.75 | 7.00 | 6.50 |
| Central Bank of India | 7.15 | 6.75 | 6.50 | 6.25 |
| State Bank of India | 7.10 | 6.80 | 6.50 | 6.50 |
| UCO Bank | 7.05 | 6.50 | 6.30 | 6.20 |
Interest rates as of 20 September 2023
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Top 10 Corporate FD Rates in India – 2023
| Company Name |
Interest Rates (p.a.) | Tenure range |
Additional interest rate for senior citizen |
||
| 1-year | 3-year | 5-year | |||
| Manipal Housing Finance Syndicate Ltd. | 8.25% | 8.25% | 7.75% | 12-60 months | – |
| Mahindra Finance | 7.60% | 8.05% | 8.05% | 12-60 months | 0.25% |
| Sundaram Home Finance | 7.45% | 7.75% | 7.90% | 12-60 months | 0.50% |
| Sundaram Finance | 7.45% | 7.75% | – | 12-36 months | 0.35% |
| Bajaj Finance Limited | 7.40% | 8.05% | 8.05% | 12-60 months | 0.25% |
| PNB Housing Finance Ltd. | 7.35% | 7.70% | 7.50% | 12-120 months | 0.25% |
| Shriram Finance Ltd.* | 7.34% | 7.95% | 8.18% | 12-60 months | 0.50% |
| LIC Housing Finance Ltd. | 7.25% | 7.75% | 7.75% | 12-60 months | 0.25% |
| ICICI Home Finance | 7.00% | 7.45% | 7.30% | 12-60 months | 0.25% |
| Kerala Transport Development Finance Corporation | 7.00% | 7.00% | 6.75% | 12-60 months | 0.25% |
*At Monthly Rests. Additional interest of 0.25% p.a. is applicable on all renewals where the deposit is matured.
Interest rates as of 20 September 2023
To know more about Corporate/Company Fixed Deposits, click here.
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FD Interest Rates by Foreign Banks
| Interest Rates (p.a.) |
||||
| Bank Name | Highest slab (%) | 1-year tenure (%) | 3-year tenure (%) | 5-year tenure (%) |
| Deutsche Bank | 7.75 | 7.00 | 7.75 | 7.50 |
| Standard Chartered Bank | 7.50 | 7,15 | 7.10 | 6.75 |
| HSBC Bank | 7.25 | 4.00 | 7.00 | 6.00 |
Interest rates as of 20 September 2023
Post Office FD Interest Rates
| Tenure | Rate of Interest* (% p.a.) |
| 1 year | 6.90 |
| 2 years | 7.00 |
| 3 years | 7.00 |
| 5 years | 7.50 |
*Quarterly compounding; the aforementioned interest rates were effective from 1 July 2023 to 30 September 2023
Click here to check the latest Post Office FD schemes & interest rates.
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Fixed Deposit Rates for Senior Citizens (Aged 60 years & above)
- At the time of account opening, the senior citizen must be 60 years old or older.
- Fixed deposit interest rates for senior citizens are usually about 0.50% higher than FD rates offered to other depositors.
- Most banks provide senior citizen FDs with tenure ranging from seven days to ten years.
- Loans can be taken out against a senior citizen’s FD.
Important considerations that will help you invest in the best Fixed Deposit plan
Here is a quick guide to help you choose the best FD to invest in:
- Safety of capital: Capital protection and income certainty are the two major benefits of opening fixed deposits. While most people consider public sector and large private sector banks to be much safer, the degree of capital safety also depends on how RBI categorises other banks.
Banks categorised as scheduled banks are covered under the deposit insurance program of DICGC, an RBI subsidiary. This insurance program covers cumulative deposits of each depositor for their fixed, recurring, current and savings of up to Rs 5 lakh with each scheduled bank, in case of bank failures. Hence, depositors seeking maximum level of capital protection for their fixed deposits should enquire whether the concerned bank has been listed under the scheduled bank category.
Those opening corporate FDs should check the credit rating of NBFCs/HFCs assigned by credit rating agencies such as CRISIL, ICRA, CARE, etc. before opening their company/corporate fixed deposits. NBFCs/HFCs having higher credit ratings can be considered to be safer in terms of income certainty and principal protection than those having lower ratings.
- Interest rate: FD interest rates depend on the bank/NBFC/HFC and the tenure chosen. Currently, some small finance banks and private sector banks are offering the highest FD slab rates of 8% a., which is around 1% – 1.5% higher than the highest FD rates offered by the public sector banks and larger private sector banks.
- Liquidity and the time horizon of financial goals: Besides the highest FD interest rates, depositors should also consider liquidity and time horizon of their financial goals before choosing their FD tenure. This is because ignoring them can force them to close their fixed deposits prematurely in case of financial exigencies or maturity of an overlooked financial goal. Moreover, premature withdrawals of bank FDs can cost the depositors premature withdrawal penalty of up to 1% on the effective interest rate, which is usually the lower of the original booked FD interest rate or the FD interest for the period for which the FD has been into effect at the time of opening the FD.
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FAQs
Q. What are the tax benefits of investing in a fixed deposit in India?
Ans. Most banks offer tax saving FDs, which have a lock-in period of 5 years and also extend tax benefit of up to 1.5 lakh u/s 80 of the IT Act, 1961 on the amount deposited. However, the interest income accrued from the tax saver fixed deposits is taxed as per the income tax slab of the depositor.
Q. Is FD a safe investment option?
Ans. Yes, an FD is a safe investment option for risk-averse investors high degree of capital protection and income certainty. Moreover, all scheduled banks are covered under the depositor insurance program of Deposit Insurance and Credit Guarantee Corporation (DICGC). This means that bank deposits of up to Rs. 5 lakh, including fixed, recurring, savings and current deposits, per depositor per bank, are insured. Investments under Post Office qualify for sovereign guarantee, i.e. the repayment of interest and principal components are guaranteed by the Government of India.
Q. What are the premature withdrawal penalty charges for FD?
Ans. Banks and NBFCs charge a penalty of 0.5% – 1% on premature withdrawals from FD accounts.
Q. Can I take a loan against FD?
Ans. Loan against FD is an important feature of fixed deposits and thus, most of the banks do offer this option to their customers. You can get a loan of up to 90% of the deposit amount (may vary as per your bank).
Q. Can I prematurely withdraw a tax saving FD?
Ans. No, the tax saving fixed deposit comes with a lock-in period of 5 years. This can be prematurely liquidated in case of the death of the FD holder/primary account holder.
Q. What is the minimum amount required to invest in a tax-saving FD?
Ans. You can start investing from Rs. 100 in a tax saving fixed deposit. However, most of the banks have kept Rs. 1,000 as the minimum deposit amount. It can go up to Rs. 1.5 lakh.
Q. When is tax at source deducted on FD interest income?
Ans. If your fixed deposit interest income exceeds Rs 40,000 in a financial year, then your provider exercises TDS. For senior citizens, this limit is Rs 50,000. This can be avoided by submitting Form 15G/H. These limits are for bank fixed deposits or time deposits only.
10 Comments
How can we check the CRISIL rating of Small Finance banks, NBFC’s and Corporate bonds for both Short and Long term
Hi Sanjay,
To check the CRISIL rating of a company, follow these steps:
1. Visit crisil.com
2. On the home page, enter the name of the company/bank
3. Hit the “View Rating” button.
4. If there is more than one company under a similar name, you will be shown a list.
5. Click on the link which shows the exact name of the company/bank you wish to check.
A Factsheet will be displayed. Look under the “Ratings” section and the “Outlook” section to check the current status.
Sir, I want to invest about 12 lakhs in small finnce banks equally. for 5 years. Now by D I C G C cover I can get my amount invested at present. , Please clarify while failure is governed by R B I is it possible that the repayment of amount invested includes interest earned also . eg My investment in a small finance bank is Rs 4 lacks @ 8% p.a for 4 years., After 2 years the bank fails. Will I get 4 lakhs or 4 lakhs -interest earned and whether the D I C G C cover is till the period of maturity of the deposit and incase the bank fails before the maturity when will I get the amount invested.
Hi Gopal,
DICGC covers both – the amount invested + the interest earned. BUT, the total should not be more than Rs. 5 lakh. Now, is you invest Rs. 4 lakh and earn interest of Rs. 50,000 on it, you will get compensation of Rs. 4.5 lakh. However, if the interest is, say, Rs. 1,10,000 and the bank defaults, you will get Rs. 5 lakh only. The remaining Rs. 10,000 will not be included in the cover.
This deposit insurance is active as long as your FD is active, i.e. till the maturity. If the bank defaults before maturity, you will get the compensation within the stipulated time. You will not have to wait for your FD to mature to get the compensation.
Therefore, we suggest that you invest Rs. 12 lakh in different banks. Break it into smaller portions, e.g. Rs. 3 lakh each and then invest. This way you can safeguard your interest the best.
You may read more about DICGC insurance here.
How do fixed deposit in finance company work? it is safe or not & is breaking FD before maturity available or not?
Like banks, companies also provide premature withdrawal facility but it comes with some penalty.
As far as safety is concerned, fixed deposits in companies carry some risk always. You cannot completely match it with FDs in scheduled banks. Deposits made in Non-Banking Financial Companies are not covered under the DICGC insurance, which makes it somewhat risky. To compensate for that, these companies generally offer higher interest rates than what banks have to offer. However, RBI keeps a track of these companies and regularly monitors their financial health to ensure the welfare of depositors.
It is advised to check the credit rating of any company that you are thinking of putting your money in. Do good research about the company’s background and the recent news surrounding it. This way, you can knit your safety net to a certain extent.
I have a question on the DICGC deposit insurace. I understand that deposits upto Rs. 5 Lakhs is covered. Is it Rs. 5 Lakh per account per bank or is it across all banks. For example, if one invests Rs. 5 L as FD in 3 different banks will the entire Rs. 15 Lakhs be covered or is the total limited to Rs. 5 Lakhs? Thanks, Brahmanya
Hi Brahmanya,
It’s a valid question. This deposit insurance will cover deposits up to Rs. 5 lakh in each bank. This includes all types of deposits held in the same bank. If you have deposits of Rs. 5 lakh each in 3 different banks, then all the 3 deposits will be covered separately.
Therefore, if all the 3 banks default, you will get a total of Rs. 15 lakh. However, note that if you have Rs. 2 lakh in 1st bank, Rs. 4.5 lakh in 2nd bank and Rs. 5.5 lakh in 3rd bank, then you will be paid a total of (2+4.5+5.5) Rs. 12 lakh because the limit is up to Rs. 5 lakh per bank.
For more information, click here.
what is the risk of investing in small bank fd as compare to big commercial psu bank pl?
Small finance banks are created to cater to the needs of the public in rural and semi-urban areas. These are listed scheduled banks under the RBI, thus the risk-factor is well-taken care of. FD made in small finance banks is covered under the DICGC deposit insurance of Rs. 5 lakh which is paid as compensation if the bank defaults. Therefore, the security part is not alarming. However, it is still suggested to do your research first, analyse your options and then go ahead with investing in small finance banks.