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
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
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.