Fixed Deposit Interest Rates Comparison 2026
Fixed Deposits remain one of the most popular investment options in India due to their guaranteed returns and capital safety. However, FD rates vary significantly across banks — choosing the right bank can earn you 0.5-1.5% more annually on the same deposit. This guide compares the latest FD rates from top banks and helps you maximise your returns.
Latest FD Rates: Major Banks (General Citizens)
| Bank | 1 Year | 2 Years | 3 Years | 5 Years | Special Rate |
|---|---|---|---|---|---|
| SBI | 6.80% | 7.00% | 6.75% | 6.50% | 7.10% (444 days) |
| HDFC Bank | 6.60% | 7.15% | 7.10% | 7.00% | 7.35% (55 months) |
| ICICI Bank | 6.70% | 7.10% | 7.10% | 7.00% | 7.25% (505 days) |
| Kotak Mahindra | 6.75% | 7.15% | 7.10% | 6.50% | 7.40% (390 days) |
| Axis Bank | 6.70% | 7.10% | 7.10% | 7.00% | 7.20% (30 months) |
| Bank of Baroda | 6.85% | 7.05% | 6.50% | 6.50% | 7.25% (400 days) |
Small Finance Banks: Higher FD Rates
| Bank | 1 Year | 2 Years | 3 Years | 5 Years |
|---|---|---|---|---|
| AU Small Finance | 7.25% | 7.50% | 7.25% | 7.25% |
| Equitas SFB | 7.50% | 7.75% | 7.25% | 7.00% |
| Ujjivan SFB | 7.40% | 7.60% | 7.30% | 7.10% |
| Unity SFB | 7.75% | 8.00% | 7.50% | 7.25% |
Small Finance Banks offer 0.5-1% higher rates than large banks. Your deposits up to Rs 5 lakh are fully insured by DICGC (Deposit Insurance and Credit Guarantee Corporation), the same protection available at SBI or HDFC Bank. For amounts above Rs 5 lakh, split across multiple banks to stay within the insurance limit.
Senior Citizen FD Rates
Senior citizens (age 60+) receive an additional 0.25-0.75% interest on FDs across all banks. Super senior citizens (80+) get an even higher premium at select banks. For a senior citizen, the effective FD rate at small finance banks can exceed 8.5%, which is excellent for risk-free retirement income.
FD Laddering Strategy
Instead of locking all your money in a single FD, create an FD ladder with different maturities. For example, with Rs 10 lakh: put Rs 2.5 lakh each in 1-year, 2-year, 3-year, and 5-year FDs. As each shorter FD matures, reinvest it at the longest tenure. This gives you regular liquidity while earning higher long-term rates.
Tax on FD Interest
FD interest is fully taxable as per your income tax slab. Banks deduct TDS at 10% if total interest from all FDs at that bank exceeds Rs 40,000 in a year (Rs 50,000 for senior citizens). If your total income is below the taxable limit, submit Form 15G (or 15H for seniors) to avoid TDS deduction.
Frequently Asked Questions
Is it worth breaking an old FD for higher rates? Calculate the premature withdrawal penalty (typically 0.5-1%) against the interest rate gain on a new FD. If the new rate is 1%+ higher and significant tenure remains, breaking and rebooking often makes sense.
Are small finance bank FDs safe? Yes, deposits up to Rs 5 lakh are insured by DICGC regardless of bank type. Small finance banks are regulated by RBI with the same prudential norms as large banks.
Should I choose cumulative or non-cumulative FD? Choose cumulative if you do not need regular income — the interest compounds and gives you a higher effective return. Choose non-cumulative (monthly/quarterly payout) only if you need regular cash flow, such as retirees.