Fixed deposit rates peak at 8.5%: What various banks are offering in Sept

Indian households trust bank fixed deposits (FDs) for their stable returns, but with lenders offering a range of interest rates it’s critical to check terms.

 

Small finance banks lead the pack

 

According to the data compiled by Paisabazaar.com, Small finance banks (SFBs) offer the most attractive deposit rates. Slice Small Finance Bank tops the chart, promising 8.50 per cent for FD tenure of just over 18 months. Jana Small Finance Bank offers 8.00 per cent and 8.20 per cent, respectively, for five-year deposits.

 

Other notable SFB rates:

 

• Utkarsh Small Finance Bank: 7.65 per cent for 2-3 years
• ESAF Small Finance Bank: 7.60 per cent for 444 days

 

Small finance banks' FD rates 

Bank Fixed Deposit Rates
Bank Name	Interest Rates (p.a.)
	Highest slab
	%	Tenure
SMALL FINANCE BANKS
AU Small Finance Bank	7.10	2 years 1 day to 3 years
Equitas Small Finance Bank	7.40	888 days
ESAF Small Finance Bank	7.60	444 days
Jana Small Finance Bank	8.00	5 years
Shivalik Small Finance Bank	7.60	18 months to 24 months
slice Small Finance Bank	8.50	18 months 1 day to 18 months 2 days
Suryoday Small Finance Bank	8.20	5 years
Ujjivan Small Finance Bank	7.45	2 years
Utkarsh Small Finance Bank	7.65	2 years to 3 years

 

While higher returns are tempting, experts caution that SFBs are relatively new in the finance industry and may carry higher risk than larger banks. Bank deposits of up to Rs 5 lakh are insured under Deposit Insurance and Credit Guarantee Corporation.

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Private-sector banks typically offer lower FD returns compared to SFBs but higher than state-owned banks. SBM Bank India leads, offering 7.50 per cent interest rate for five years. RBL Bank, Bandhan Bank and DCB Bank follow closely, all offering around 7.20 per cent for select tenures.

 

Other competitive private bank rates include:

 

• Jammu & Kashmir Bank: 7.30 per cent (888 days)
• IDFC FIRST Bank & IndusInd Bank: around 7.00 per cent (1–2 years)

 

Large lenders like HDFC Bank and ICICI Bank remain in the 6.40-6.60 per cent range, reflecting their stability but modest payouts.

 

Private bank FD rates

 

Bank Fixed Deposit Rates
Bank Name	Interest Rates (p.a.)
	Highest slab
	%	Tenure
PRIVATE SECTOR BANKS
Axis Bank	6.60	18 months to 10 years
Bandhan Bank	7.20	2 years to less than 3 years
City Union Bank	6.75	365 days
CSB Bank	6.80	13 months
DBS Bank	6.55	376 days to 600 days
DCB Bank	7.20	27 months to less than 28 months; Above 60 months to 61 months
Federal Bank	6.70	999 days
HDFC Bank	6.60	18 months to less than 21 months
ICICI Bank	6.60	2 years 1 day to 10 years
IDFC FIRST Bank	7.00	450 days to 2 years
IndusInd Bank	7.00	1 year 1 month to 2 years
Jammu & Kashmir Bank	7.30	888 days
Karur Vysya Bank	6.65	333 days
Karnataka Bank	6.65	555 days
Kotak Mahindra Bank	6.60	391 days to 23 months
RBL Bank	7.20	2 years 1 day to 3 years
SBM Bank India	7.50	5 years
South Indian Bank	6.60	1 year
Tamilnad Mercantile Bank	7.05	400 days (TMB400)
YES Bank	7.00	18 months 1 day to less than 5 years

 

Public-sector banks

 

Public-sector banks’ fixed deposit rates range from 6.00 to 6.75 per cent. Central Bank of India leads the field with a 6.75 per cent interest rate, while Indian Overseas Bank offers 6.60 per cent. State Bank of India’s special 444-day scheme also offers 6.60 per cent. State Bank of India’s special 444-day scheme offers 6.60 per cent interest.

 

Other PSB rates include:

 

• Bank of Maharashtra: 6.70 per cent
• Indian Bank: 6.70 per cent
• Punjab & Sind Bank: 6.70 per cent

 

Public bank FD rates

Bank Fixed Deposit Rates
Bank Name	Interest Rates (p.a.)
	Highest slab
	%	Tenure
PUBLIC SECTOR BANKS
Bank of Baroda	6.60	444 days – BoB Square Drive Deposit Scheme
Bank of India	6.60	777 days - Star Utsav
Bank of Maharashtra	6.70	366 days
Canara Bank	6.50	444 days
Central Bank of India	6.75	2222 days; 3333 days
Indian Bank	6.70	444 days
Indian Overseas Bank	6.75	444 days
Punjab National Bank	6.60	390 days
Punjab & Sind Bank	6.70	444 days
State Bank of India	6.60	444 days - Amrit Vrishti
Union Bank of India	6.60	3 years

   

Small finance banks offer the best rates on short- and medium-term deposits, but investors should check their stability. Opening deposits with multiple financial institutions is a safe investment option.