Fixed Deposits (FDs) are one of the safest and most preferred investment options for individuals looking for stable returns. With interest rates fluctuating due to economic conditions, choosing the right bank for your FD can make a significant difference in your earnings. If you’re looking to maximize your returns, some banks are currently offering exceptionally high FD interest rates in 2025.
Highest FD Interest Rates in 2025
| Feature | Details |
|---|---|
| Top Banks Offering Highest FD Rates | Unity SFB, North East SFB, Suryoday SFB, etc. |
| Highest Interest Rate | 9.00% (Unity Small Finance Bank) |
| Tenure with Best Rates | Ranges from 1 year to 5 years |
| Senior Citizen Benefit | Additional 0.50% – 0.75% p.a. interest |
| DICGC Insurance | Deposits insured up to ₹5 lakh |
| Risk Factor | Higher rates often come with smaller banks |
Fixed Deposits remain a trusted investment choice for risk-averse individuals. With interest rates as high as 9.00% p.a., small finance banks currently offer the best returns. However, it’s crucial to check DICGC insurance, withdrawal policies, and tax implications before investing. Whether you’re a retiree looking for a stable income or a young professional planning long-term savings, FDs provide a secure and rewarding way to grow your wealth.
Why Fixed Deposits Are a Smart Investment?
Fixed Deposits are one of the most secure investment options available in India. Unlike stock markets or mutual funds, FDs offer guaranteed returns, making them ideal for conservative investors. Here are a few key benefits:
- Risk-Free Returns: Unlike market-linked investments, FDs provide assured interest rates.
- Flexible Tenure: Choose from a few months to several years.
- Higher Interest for Senior Citizens: Most banks offer 0.50%-0.75% extra for senior citizens.
- Loan Facility: You can avail of a loan against your FD in case of an emergency.
see also: SBI Green Rupee Term Deposit Earn High Interest with SBI’s 1111-Day Scheme
Top 7 Banks Offering the Highest FD Interest Rates in 2025
If you’re looking for the best FD rates, small finance banks currently dominate the market. Here’s a breakdown of the top banks offering the highest FD interest rates in India:
1. Unity Small Finance Bank – 9.00% p.a.
- Best Tenure: 1001 days
- Senior Citizen Rate: 9.50% p.a.
- Why Choose? Highest rate available, safe for deposits up to ₹5 lakh (DICGC insured).
2. North East Small Finance Bank – 9.00% p.a.
- Best Tenure: 18 months 1 day to 36 months
- Senior Citizen Rate: 9.50% p.a.
- Why Choose? Competitive rates for mid-term investors.
3. Suryoday Small Finance Bank – 8.60% p.a.
- Best Tenure: 5 years
- Senior Citizen Rate: 9.10% p.a.
- Why Choose? Long-term savings with high returns.
4. Shivalik Small Finance Bank – 8.55% p.a.
- Best Tenure: 12 months 1 day to 18 months
- Senior Citizen Rate: 9.05% p.a.
- Why Choose? Short-term but high return option.
5. Utkarsh Small Finance Bank – 8.50% p.a.
- Best Tenure: 2 years to 3 years; 1500 days
- Senior Citizen Rate: 9.00% p.a.
- Why Choose? A balanced tenure with attractive rates.
6. ESAF Small Finance Bank – 8.38% p.a.
- Best Tenure: 888 days
- Senior Citizen Rate: 8.88% p.a.
- Why Choose? Unique tenure with solid returns.
7. Jana Small Finance Bank – 8.25% p.a.
- Best Tenure: 1 year to 3 years
- Senior Citizen Rate: 8.75% p.a.
- Why Choose? Reliable for medium-term deposits.
How to Choose the Best FD Option?
Here are some important factors to consider before opening an FD account:
1. Check the Interest Rate
The higher the interest rate, the better your returns. However, always compare rates across different tenures.
2. Consider the Bank’s Credibility
Small finance banks offer higher FD rates but may carry slightly more risk. Ensure your deposits are within the ₹5 lakh DICGC insurance limit.
3. Look at Premature Withdrawal Rules
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Some banks charge penalties if you break your FD early. Always check the terms before investing.
4. Evaluate Tax Implications
Interest earned on FDs is taxable. You may want to invest in Tax-Saver FDs (with a 5-year lock-in) for deductions under Section 80C of the Income Tax Act.
5. Senior Citizen Benefits
If you’re a senior citizen, look for extra interest rates, which can increase returns.
see also:Post Office PPF Scheme Secure Your Future with ₹10 Lakh Savings
Highest FD Interest Rates in 2025 FAQs
1. Which bank is offering the highest FD interest rate in 2025?
Unity Small Finance Bank and North East Small Finance Bank offer the highest 9.00% p.a. interest rate on FDs.
2. Is it safe to invest in small finance banks?
Yes, up to ₹5 lakh is insured under DICGC insurance, ensuring deposit safety.
3. What is the FD interest rate for senior citizens?
Senior citizens get 0.50%-0.75% extra over the regular rates.
4. Can I break my FD before maturity?
Yes, but banks may charge a premature withdrawal penalty.
5. How is FD interest taxed?
FD interest is taxable under your income tax slab. If interest exceeds ₹40,000 (₹50,000 for seniors), TDS at 10% is deducted.
