Fixed Deposit Interest Rates

What are Fixed Deposit Interest Rates?

A fixed deposit interest rate is the guaranteed annual return a bank or non-banking financial company (NBFC) locks in when you deposit a lump sum for a fixed period. Whatever rate is agreed at booking is what you get at maturity.

As of May 2026, FD rates range from 2.50% to 8.30% p.a. for general depositors and up to 8.80% for senior citizens.

Your actual return depends on five things: how much you deposit, for how long, whether you pick a cumulative FD (interest reinvests and pays out at maturity) or non-cumulative (interest paid monthly or quarterly), how frequently interest compounds (quarterly, by default in most banks), and your depositor category (regular or senior citizens).

Simple interest applies to deposits shorter than 6 months. Everything above that tenure compounds quarterly.

Best FD Interest Rates Today

Here is an overview of the highest FD interest rates available across different banks and NBFCs. Rates shown are for retail deposits below Rs. 3 crore.

Note: FD interest rates w.e.f. May 2026. Rates are subject to change.

Fixed Deposit Calculator

An FD calculator is a financial tool that helps you see how your investment is going to grow over time. At the same time, you could also use the calculator to plan your investment if you have a specific corpus or a timeline in mind.

You may also like to use this calculator to estimate your returns once you have decided how much you want to invest. Just select your investment amount, the expected interest rate, and the tenure. The calculator will give you a breakdown comprising the interest earned and the total maturity amount. You could use the calculator to plan your investment in a smarter way.

Top 10 Banks Offering Highest FD Interest Rates

The following banks are among the top performers for fixed deposit interest rates in India. Rates are for retail deposits below Rs. 3 crore, and reflect the best available rate across any tenure.

Note: Rates shown are the highest available across any tenure at each institution w.e.f. May 2026.

FD Interest Rates Comparison

To help you compare across major institutions at a glance, here is a consolidated rate card for the most commonly chosen 1-year and 3-year tenures. All rates are for deposits below Rs. 3 crore.

Note: FD interest rates w.e.f. May 2026. Rates are subject to change.

Bank-wise FD Interest Rates

Public Sector Banks FD Rates

Public sector banks, backed by the Government of India, are considered among the safest places to invest. While their FD rates may be marginally lower than private or small finance banks, they offer unmatched stability and trust.

Note: FD interest rates w.e.f. May 2026. Rates are subject to change.

Private Sector Banks FD Rates

Private sector banks typically offer marginally higher FD rates than public sector banks to attract deposits.

Note: FD interest rates w.e.f. May 2026. Rates are subject to change.

Small Finance Banks (SFBs) FD Rates

Small Finance Banks are RBI-regulated institutions primarily serving underserved segments. To attract retail deposits, they offer significantly higher interest rates than conventional banks.

Note: FD interest rates w.e.f. May 2026. Rates are subject to change.

NBFC & Corporate FD Rates

NBFCs and Housing Finance Companies (HFCs) generally offer higher FD rates than banks.

Note: NBFC FD rates are subject to change.FD interest rates w.e.f. May 2026.

Foreign Banks FD Rates

Foreign banks operating in India offer FD facilities primarily to their existing account holders. Their rates are broadly comparable to large private sector Indian banks, though they may not always offer the most competitive rates in the market.

Note: Foreign bank FD interest rates w.e.f. May 2026. Rates are subject to change.

Special FD Schemes

Beyond the standard fixed deposit, several banks have introduced purpose-built FD schemes with non-standard tenures, exclusive eligibility criteria, or an environmental mandate. These special schemes often carry a modest rate premium over regular FDs and are worth evaluating before you book.

1. SBI Amrit Vrishti (444-Day FD)

   A special fixed-tenure scheme from SBI, Amrit Vrishti locks your deposit at exactly 444 days with no flexibility on tenure. It offers a rate premium over SBI’s comparable standard tenures: The minimum deposit is Rs. 1,000 and it can be opened online via YONO or SBI net banking. Best suited for conservative investors with a defined short-to-medium-term horizon who want a better rate without switching banks.

2. SBI WeCare FD

   Exclusively for senior citizens, SBI WeCare is designed for tenures of 5 years and above. It offers a total rate benefit of 0.60% over the general public rate. Available across 5- to 10-year tenures via branch, net banking, or YONO, it is one of the most rewarding long-term FD options for retirees at a large public sector bank.

3. Bank of Baroda 444-Day Special FD

   Bank of Baroda offers a 444-day special FD at 6.60% p.a. for general depositors and 7.10% for senior citizens, both rates notably higher than its standard 1- and 2-year offerings. PSU banks commonly use non-standard tenures (444, 400, or 555 days) as a tactical tool to attract deposits at above-card rates without committing to a broad rate revision.

4. Green Fixed Deposits

   Green FDs work like a standard fixed deposit in every respect except that the funds are ring-fenced and deployed exclusively towards environmentally sustainable projects such as renewable energy, green buildings, and waste management, under the RBI’s Green Deposit Framework.

   Banks offering Green FDs include HDFC Bank, IndusInd Bank, Federal Bank, Union Bank of India, HSBC India, DBS Bank India, and SBI special FD schemes (whose Green Rupee Term Deposit uses distinctive tenures of 1111, 1777, and 2222 days).

5. Tax-Saving Fixed Deposits

   A Tax-Saving Fixed Deposit lets you claim a deduction of up to Rs. 1.5 lakh per financial year under Section 80C of the Income Tax Act, 1961. It comes with a mandatory lock-in period of 5 years, and premature withdrawal is not permitted. Only individual investors and Hindu Undivided Families (HUFs) are eligible to invest. For jointly held FDs, only the first account holder can claim the Section 80C deduction.

   The interest earned on a Tax-Saving FD is fully taxable as per your income tax slab. These FDs are available at all scheduled commercial banks, with most major banks offering rates between 6.40% and 7.00% per annum for general depositors. Senior citizens enjoy an added benefit, earning an additional 0.50% over the standard rate.

6. Post Office FD

   The Post Office Time Deposit (POTD) offers government-backed security with quarterly-compounded Post Office FD interest rates. Currently, rates range from 6.9% for one-year tenures to 7.5% for five-year accounts. Notably, the five-year deposit qualifies for tax benefits under Section 80C, making it a preferred safe-haven investment for conservative Indian savers.

Fixed Deposit Rates for Senior Citizens

Senior citizens earn a higher FD rate than regular depositors. Most banks offer an additional 0.50% p.a., and some offer up to 0.75% extra for super senior citizens aged 80 and above. This makes FDs particularly suited to retirees who need guaranteed, predictable income without taking any market-related risk.

As of May 2026, the highest senior citizen FD rates go up to 8.80% p.a. at select Small Finance Banks, and up to 9.35% p.a. from NBFCs like Muthoot Capital. Compare rates across banks before booking. Even a 0.25% difference compounds visibly over a 3 to 5 year tenure.

How FD Interest Rates Are Calculated

Understanding how FD interest is calculated helps you make more informed decisions and compare returns across different products. There are two primary methods:

Simple Interest (SI)

Simple interest is used for non-cumulative FDs where interest is paid out at regular intervals — monthly, quarterly, half-yearly, or annually. In this case, the interest is calculated only on the original principal and does not compound.

Formula: SI = (P x R x T) / 100

Example: Principal = Rs. 5,00,000 | Rate = 6.50% p.a. | Tenure = 3 years

SI = (5,00,000 x 6.50 x 3) / 100 = Rs. 97,500

Monthly interest payout = Rs. 97,500 / 36 = Rs. 2,708 approximately

Compound Interest (CI)

Compound interest is used for cumulative FDs where the interest earned is added back to the principal and reinvested. Banks in India typically compound interest on a quarterly basis.

Formula: A = P x (1 + r/n)^(n x t)

Example: Principal = Rs. 5,00,000 | Rate = 6.50% p.a. | Tenure = 3 years | Compounding: Quarterly

r = 0.065, n = 4, t = 3

A = 5,00,000 x (1 + 0.065/4)^(4x3) = 5,00,000 x (1.01625)^12 = approximately Rs. 6,03,878

Interest earned = Rs. 6,03,878 - Rs. 5,00,000 = Rs. 1,03,878

As you can see in the calculation above, the effect of compounding becomes significantly larger with higher principals and longer tenures.

Key Factors Affecting FD Interest Rates

FD interest rates in India are shaped by a combination of factors. Understanding these factors helps you anticipate rate movements and make smarter investment decisions.

1. RBI Repo Rate

   The single biggest driver of FD rates. When the RBI raises the repo rate, banks tend to raise FD rates to attract deposits. When the RBI cuts the repo rate FD rates typically decline over time.

2. Bank Liquidity Position

   Banks with a surplus of funds may lower FD rates, as they do not urgently need to attract deposits. Conversely, banks with tight liquidity or high credit growth offer higher rates to mobilise retail deposits.

3. Inflation

   Higher inflation often prompts the RBI to tighten monetary policy, keeping interest rates elevated. In a low-inflation environment FD rates tend to moderate.

4. Type of Bank

   Small Finance Banks and newer private banks consistently offer higher FD rates than large PSU banks, primarily due to their need to build a retail deposit base and fund loan growth.

5. Credit Demand

   When loan disbursements are high, banks need more deposits to maintain their credit-deposit ratio. This creates upward pressure on FD rates.

6. Deposit Tenure

   Longer tenures generally attract higher rates, though the curve can flatten or even invert during periods of monetary easing.

7. NBFC Funding Model

   NBFCs rely heavily on public deposits for funding. Their FD rates are driven by their internal cost of funds, credit ratings, and the spread they need over bank borrowing costs.

FD Interest Rate Trends & Latest Updates

The FD rate cycle has been through significant movement over the past few years. Here is a brief overview of the key trends:

• 2022-2023 (Rate Hike Cycle): The RBI raised the repo rate aggressively between May 2022 and February 2023, in response to post-COVID inflationary pressures. FD rates surged across banks, with peak rates at large private banks touching 7.00% to 7.25%.
• 2024 (Stable Phase): The RBI maintained the repo rate at 6.50% through most of 2024 as inflation remained above its 4% target. FD rates held steady in the 6.50% to 7.25% range.
• 2025 (Rate Cut): The RBI began cutting rates in February 2025, cumulatively lowering the repo rate by 125 basis points to 5.25% by December 2025. FD rates started declining across banks. However, Small Finance Banks and NBFCs kept rates elevated to maintain deposit inflows.
• 2026 (Current Scenario): The RBI held the repo rate at 5.25% in April 2026, maintaining a neutral stance. FD rates have moderated from their 2022-23 peaks but remain attractive in real terms given India's low inflation environment. Banks and NBFCs are offering rates ranging from 6.25% to 8.30% p.a. for general depositors as of May 2026.

FD Taxation & TDS Rules

Interest earned on a fixed deposit is fully taxable under the head 'Income from Other Sources' as per the Income Tax Act, 1961. It is added to your total income and taxed at your applicable income tax slab rate. There is no separate tax-exemption on FD interest (except for the principal amount in a tax-saving FD under Section 80C).

TDS on FD Interest

Banks and NBFCs are required to deduct Tax at Source (TDS) on FD interest income that exceeds the following thresholds in a financial year:

• Regular depositors: TDS deducted if interest income from a single bank exceeds ₹50,000 per year
• Senior citizens: TDS deducted if interest income exceeds ₹1,00,000 per year

TDS is deducted at 10% if your PAN is registered with the bank. If PAN is not provided, TDS is deducted at 20%. The TDS deducted can be claimed as a credit when you file your income tax return. Depositors can use Form 15G/15H for avoiding TDS.

Which Fixed Deposit is Right for You?

Choosing the right fixed deposit depends on your financial goals, risk tolerance, investment horizon, and tax situation. Here is a quick guide to help you identify the most suitable FD category:

How to Choose the Right Fixed Deposit?

With dozens of banks, NBFCs, and SFBs offering FDs at varying rates and tenures, selecting the right one requires a structured approach.

Here is a step-by-step guide for choosing the right FD:

• Define your goal: Are you parking an emergency fund, saving for a specific milestone, generating regular income, or saving tax? Your goal determines the ideal tenure.
• Decide the tenure: Choose a tenure aligned with when you need the money. Avoid unnecessarily long tenures if you foresee liquidity needs, as premature withdrawal carries a penalty.
• Compare interest rates: Use comparison tools to evaluate rates across banks and NBFCs for your chosen tenure.
• Choose the payout mode: If you need regular income, opt for a non-cumulative FD with monthly or quarterly payouts. If you want to maximise wealth creation, choose cumulative (at maturity).
• Consider the taxation: If you are in a higher income tax bracket, FD interest is taxed at your slab rate. Compare post-tax returns with tax-efficient alternatives like debt mutual funds before deciding.
• Diversify your FDs: Instead of investing all your money in a single FD, consider spreading across multiple tenures (FD laddering). This gives you periodic liquidity, reduces reinvestment risk, and helps you benefit from rate changes.

Types of Fixed Deposits

Fixed deposits are not a one-size-fits-all product. Indian banks and NBFCs offer a variety of FD structures to suit different investor needs. Here are the main types:

1. Cumulative FDs

   Interest is compounded (usually quarterly) and reinvested throughout the tenure. The total amount is paid out at maturity. Best suited for wealth creation goals where regular income is not required.

2. Non-Cumulative FDs

   Interest is paid out at regular intervals: monthly, quarterly, half-yearly, or annually. The principal is returned at maturity. Ideal for retirees or anyone who needs a steady income stream.

3. Tax-Saving FD

   A 5-year FD that qualifies for deduction under Section 80C of the Income Tax Act. Premature withdrawal is not allowed. Interest is fully taxable.

4. Callable and Non-Callable

   Callable FDs allow premature withdrawal (with a penalty). Non-callable FDs do not allow early withdrawal but typically offer a slightly higher interest rate as compensation for the commitment.

5. Floating Rate Fixed Deposit

   The interest rate is linked to a reference rate (typically the RBI's repo rate or a T-bill rate) and changes periodically as the reference rate moves. Useful when you expect interest rates to rise in the future.

6. Flexi/Sweep-in FD

   FDs can be linked to your savings account to enable the sweep-in/sweep-out feature. When your savings account balance exceeds a set threshold, the surplus amount is automatically swept into an FD. When you need funds, the FD is liquidated in reverse order. Combines the liquidity of a savings account with FD-level returns.

FD for NRIs

Non-Resident Indians (NRIs) have access to three specialised FD categories in India:

1. NRE Fixed Deposit (Non-Resident External):

   Funded with foreign income remitted to India, these deposits get special NRE FD rates. Principal and interest are freely repatriable. Interest is completely tax-free in India. Tenure from 1 to 10 years.

2. NRO Fixed Deposit (Non-Resident Ordinary):

   Used to manage income earned in India (rent, dividends, etc.) and linked to an NRO account. Only principal is repatriable (up to USD 1 million per financial year). Interest is taxable in India at 30% TDS (unless covered by a DTAA). Tenure from 3 months to 10 years.

3. FCNR Fixed Deposit (Foreign Currency Non-Resident):

   Deposits maintained in a foreign currency (USD, GBP, EUR, etc.) through an FCNR account. No exchange rate risk. Both principal and interest are fully repatriable and tax-free in India. Tenure from 1 to 5 years.

Features & Benefits of Fixed Deposit

Fixed deposits have endured as a preferred savings instrument for decades because they offer a compelling combination of safety, certainty, and flexibility. Here are the key features and benefits:

• Guaranteed returns: The interest rate is fixed at the time of booking and does not change during the tenure, regardless of market conditions.
• Tenure options: Choose from 7 days to 10 years based on your liquidity and investment needs.
• Flexible payout options: Choose between cumulative (at maturity) or non-cumulative (monthly, quarterly, half-yearly, or annual) interest payouts.
• Premature withdrawal: Most FDs allow premature withdrawal with a penalty of 0.50% to 1.00% on the applicable rate, providing emergency liquidity.
• Loan against FD: Banks typically offer overdraft or loans on FD of up to 60% to 90% of the FD amount, allowing you to access funds without breaking the FD.
• Credit card against FD: You can also use your deposits as collateral to get a quick and easy access to a credit card against FD.
• Nomination facility: Add a nominee for your FD to ensure smooth claim settlement in the event of the depositor's absence.
• Auto-renewal: Opt for automatic renewal at maturity to seamlessly roll over your investment without manual intervention.
• Senior citizen benefits: Additional interest of 0.50% and a higher TDS exemption threshold.
• Tax-saving option: 5-year tax-saving FDs qualify for Section 80C deduction up to Rs. 1.5 lakh.
• Capital protection: Your principal amount is completely protected. Bank FDs carry DICGC insurance up to Rs. 5 lakh per depositor per bank.

Fixed Deposit Eligibility & Process

Indian resident adults are eligible to book an FD on their. Non-resident Indians could either choose an NRO or NRE account account to book a deposit. Minors can also book an FD with supporting documents of their guardians/parents.

Eligibility Criteria

The following categories of investors are generally eligible to open a fixed deposit in India:

• Resident Indian individuals (including minors with a guardian)
• Hindu Undivided Families (HUFs)
• Sole proprietorship firms
• Partnership firms
• Private and public limited companies
• Trusts and associations
• Non-Resident Indians (NRIs) - eligible for NRE, NRO, and FCNR FDs

Documents Required

To open a fixed deposit, you will typically need the following documents:

• PAN Card (mandatory for all investors; required for TDS-related purposes)
• Aadhaar Card or any other valid government-issued identity proof
• Address proof - utility bills, Aadhaar, Voter ID, or Driving Licence
• Passport-size photographs (2)
• Age proof (for senior citizen benefits) - birth certificate, Aadhaar, or passport
• For NRIs: Passport, visa, and NRE/NRO account details

How to Open a Fixed Deposit

Booking an FD is quick and hassle-free. You just need an active account with the bank or NBFC where you want to open a deposit account. You can choose an online or offline method that suits you and book an FD instantly.

Online FD Booking

• Internet/Mobile Banking: Log in to your internet or mobile banking app.
• Deposits: Head to the "Deposits" Select the option to open a new Fixed Deposit.
• Amount & tenure: Choose your investment amount and the tenure.
• Payout frequency: Select how you want to receive your interest payments.
• Submit: Review all the details, then click the submit button.
• Get Receipt: Download your digital FD receipt immediately after booking.

Offline Method

• Branch visit: Visit your nearest bank branch during working hours.
• FD Form: Ask a bank official for an FD application form and fill in the deposit amount and your chosen tenure.
• Authorize: Sign the form to authorize the transfer from your account.
• Submit: Submit the completed form to the bank executive and wait for the bank to process your request.
• FD Receipt: Collect your physical FD booking receipt from the counter.

Risks & Limitations of Fixed Deposits

While fixed deposits are among the safest investment instruments available, they are not without limitations. Being aware of these helps you plan better:

• Interest rate risk:

  If interest rates rise after you book an FD, you are locked into a lower rate.

• Inflation risk:

  In periods of high inflation, FD returns may not keep pace with rising prices, resulting in negative real returns.

• Premature withdrawal penalty:

  Breaking an FD before maturity attracts a penalty around 1.00% on the applicable interest rate.

• Taxability of interest:

  Unlike equity-linked savings schemes or debt mutual funds (held for more than 3 years), FD interest is taxed at your marginal slab rate.

• Credit risk in NBFCs:

  Unlike bank FDs (which carry DICGC insurance up to Rs. 5 lakh), NBFC deposits are unsecured.

• Opportunity cost:

  Locking funds in an FD means you may miss out on potentially higher returns from equity markets, mutual funds, or other investment products over the long term.

• Limited liquidity for tax-saving FDs:

  Tax-saving FDs have a mandatory 5-year lock-in period. If you need funds urgently during this period, there is no option for premature withdrawal.

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