During the one-year period from January 2025 to December 2025, RBI cut the repo rate by 125 basis points, i.e. from 6.5% to 5.25%. Banks followed the RBI by cutting fixed deposit interest rates. Since then, RBI has kept the repo rate constant at 5.25%. However, from the beginning of 2026, many banks have increased fixed deposit interest rates. In this article, we will analyze which banks are offering high fixed deposit interest rates and whether you should invest in them.
Small Finance Bank: Interest Rates on Fixed Deposits
Let’s look at the interest rates that banks are offering on fixed deposits. Small Finance Banks (SFBs) are offering the highest interest rates on fixed deposits. Some SFBs have recently increased fixed deposit interest rates from the beginning of 2026.
| bank name | Tenure | interest rate (normal) | Interest Rate (Senior Citizens) |
| Suryoday Small Finance Bank | 30 months | 8.10% | 8.25% |
| Shivalik Small Finance Bank | 21 months 1 day to 22 months | 7.80% | 8.30% |
| Jana Small Finance Bank | 3 years 1 day to less than 5 years and 5 years | 7.77% | 7.77% |
| Ujjivan Small Finance Bank | 24 months | 7.45% | 7.95% |
| Unity Small Finance Bank | 12 months | 7.25% | 7.75% |
Comment: The above interest rates are till April 15, 2026 and are taken from the respective bank websites. Please visit the Bank’s website/app for latest FD rates.
The above table shows that Suryoday SFB offers the highest interest rate of 8.10% on fixed deposits for a tenure of 30 months. For other tenures, such as 5 years, the bank offers an interest rate of 7.90% and for a tenure of 18 months, an interest rate of 7.60%.
The highest interest rate for Shivalik SFB is 7.80% on fixed deposits for the tenure of 21 months 1 day to 22 months. For other tenures, such as 18 months to 21 months and 22 months 1 day to 24 months, the bank offers an interest rate of 7.00%.
The highest interest rate for Jana SFB is 7.77% on fixed deposits with tenures ranging from 3 years 1 day to less than 5 years. For other tenures, such as 1 year 1 day to 2 years and 2 years 1 day to 3 years, the bank offers an interest rate of 7.50%.
The highest interest rate for Ujjivan SFB is 7.45% on fixed deposits with a tenure of 24 months. For other tenures, such as 12 months to less than 24 months, and 24 months 1 day to 990 days, the bank offers an interest rate of 7.25%.
The highest interest rate for Unity SFB is 7.25% on fixed deposits with a tenure of 12 months. For various tenures ranging from 501 days to 60 months, the bank offers an interest rate of 6.75%.
Private Bank: Interest Rates on Fixed Deposits
In the previous section, we looked at the fixed deposit rates offered by SFBs. Now, let’s look at the fixed deposit rates offered by private banks.
| bank name | Tenure | interest rate (normal) | Interest Rate (Senior Citizens) |
| IDFC First Bank | 390 days | 7.40% | 7.90% |
| RBL Bank | 18 months to 36 months | 7.20% | 7.70% |
| yes bank | 36 months to less than 60 months | 7.00% | 7.75% |
| ICICI Bank | 3 years 1 day to 5 years | 6.50% | 7.10% |
| hdfc bank | Less than 3 years 1 day to 4 years 7 months | 6.50% | 7.00% |
Comment: The above interest rates are till April 15, 2026 and are taken from the respective bank websites. Please visit the Bank’s website/app for latest FD rates.
The above table shows that IDFC First Bank offers the highest interest rate of 7.40% on fixed deposits with a tenure of 390 days. For other tenures, such as 391 days to 2 years, the bank offers an interest rate of 7.25%; And for a tenure of 2 years 1 day to 5 years, it offers 7.00%.
The highest interest rate offered by RBL Bank is 7.20% on fixed deposits for a period of 18 months to 36 months. For other tenures, such as 501 days to less than 18 months, 36 months to 1 day to less than 60 months, the bank offers an interest rate of 7.00%.
The highest interest rate for Yes Bank is 7.00% on fixed deposits with tenure from 36 months to less than 60 months. For other tenures also, like 18 months 1 day to less than 24 months, 24 months to less than 35 months, 35 months 1 day to less than 36 months, the bank offers an interest rate of 7.00%.
The highest interest rate for ICICI Bank is 6.50% on fixed deposits with a tenure of 3 years 1 day to 5 years. For various other tenures, such as 5 years 1 day to 10 years and even for 5 years (Tax Saver FD), the bank offers an interest rate of 6.50%.
The highest interest rate for HDFC Bank is 6.50% on fixed deposits with tenure less than 3 years 1 day to 4 years 7 months. For various other tenures ranging from 21 months to less than 3 years, the bank offers an interest rate of 6.45%.
Public Sector Banks: Interest Rates on Fixed Deposits
The fixed deposit interest rates offered by some public sector banks are as follows.
| bank name | Tenure | interest rate (normal) | Interest Rate (Senior Citizens) |
| Punjab and Sindh Bank | 666 days | 6.75% | 7.25% |
| Indian Overseas Bank | 444 days | 6.60% | 7.10% |
| Punjab National Bank | 444 days | 6.60% | 7.10% |
| Canara Bank | 555 days | 6.60% | 7.10% |
| Bank of India | 450 days | 6.60% | 7.10% |
| IDBI Bank | 2 years 1 day to less than 3 years | 6.50% | 7.00% |
Comment: The above interest rates are till April 15, 2026 and are taken from the respective bank websites. Please visit the Bank’s website/app for latest FD rates.
The above table shows that Punjab & Sind Bank offers the highest interest of 6.75% on 666 days fixed deposit. Four out of six PSU banks are offering the highest interest rate on fixed deposits at 6.60%. However, the tenure of these fixed deposits ranges from 450 days to 555 days.
Why have banks increased interest rates on fixed deposits?
The last time RBI cut the repo rate was in December 2025 and since then it has kept the interest rates stable. Nevertheless, from the beginning of 2026, some banks have increased interest rates on fixed deposits. Some of the reasons include high credit growth rates versus slow deposit mobilization rates, competition from other fixed income instruments (small savings schemes, government and corporate bonds etc.), shifting of individual investment patterns from fixed deposits to mutual funds etc.
In the last few months, the loan growth rate has been higher than the deposit growth rate. Therefore, banks are trying to garner more deposits by making fixed deposits attractive to depositors. The interest rates on most small savings schemes are either higher or competitive than bank fixed deposit interest rates. The interest rates (till April 15, 2026) for some small savings schemes are as follows:
- Post Office 5-Year Fixed Deposit (7.5%)
- Senior Citizens Savings Scheme (8.2%)
- National Savings Certificate (7.7%)
- Sukanya Samriddhi Account (8.2%)
- Public Provident Fund (7.1%)
- Kisan Vikas Patra (7.5%)
The yield on 10-year government securities is trading between 6.9% and 7.1%. The yields on State Development Loans (SDLs) and corporate bonds are higher than those on government securities. Yields have risen over the past few months, making them attractive to investors.
Should you invest in bank fixed deposits?
Banks will have to attract more deposits to finance higher credit growth. Similarly, interest rates on small savings schemes are attractive. Yields on G-Secs, SDLs, corporate bonds etc. have increased recently.
To compete with other fixed income instruments, banks have to keep the interest rates on fixed deposits attractive. Therefore, despite the RBI maintaining status quo on the repo rate, many banks have raised their fixed deposit interest rates again in the last few months.
With the recent increase in fixed deposit interest rates by many banks, the situation has changed from cutting fixed deposit interest rates to increasing them. The fixed deposit interest rates currently offered are good. So, if you were planning to invest in bank fixed deposits, this is a good time to invest and benefit from attractive interest rates. Consider the inflation rate while investing in fixed deposits. Also note that the interest rate on fixed deposits is taxed at the individual’s slab rate.