Fixed Deposits (FDs) have long been a favorite investment choice for risk-averse individuals looking for stable and assured returns. If you’re wondering which banks offer the highest FD interest rates in 2025, you’re in the right place. We’ve researched the top banks providing the best FD rates, ensuring you maximize your returns without compromising on security.
Highest Fixed Deposit (FD) Interest Rates in 2025
| Bank Name | Interest Rate | Tenure |
|---|---|---|
| North East Small Finance Bank | 9.00% | 3 Years |
| Suryoday Small Finance Bank | 8.60% | 3 Years |
| Utkarsh Small Finance Bank | 8.50% | 3 Years |
| Bandhan Bank | 8.05% | 1 Year |
| RBL Bank | 8.00% | 500 Days |
| Canara Bank | 7.40% | 3-5 Years |
Investing in a Fixed Deposit in 2025 is a safe and smart choice for those looking for stable returns without risk. Whether you choose a small finance bank for higher returns or a public sector bank for security, there are plenty of options. Always consider factors like tenure, withdrawal penalties, and taxation before making a decision.
What is a Fixed Deposit (FD) and Why Should You Consider It?
A Fixed Deposit (FD) is a financial instrument where you deposit a lump sum of money with a bank for a fixed period at a predetermined interest rate. Unlike stocks or mutual funds, FDs offer guaranteed returns, making them an ideal choice for risk-averse investors.
Advantages of Fixed Deposits:
- Guaranteed Returns – Your principal and interest are safe.
- Flexible Tenures – Choose from short-term (7 days) to long-term (10 years) FDs.
- Higher Interest Rates than Savings Accounts – Earn more than a regular savings account.
- Tax Benefits – Some FDs offer tax exemptions under Section 80C of the Income Tax Act.
see also: Get Rs 45 Lakhs by Investing Only Rs 11 Lakhs
Best Banks Offering the Highest FD Interest Rates in 2025
Here’s a breakdown of the top banks offering competitive interest rates:
1. Small Finance Banks with the Highest FD Rates
These banks offer higher interest rates compared to traditional banks to attract customers:
- North East Small Finance Bank – 9.00% (3 years)
- Suryoday Small Finance Bank – 8.60% (3 years)
- Utkarsh Small Finance Bank – 8.50% (3 years)
Ideal for investors looking for maximum returns with shorter lock-in periods.
2. Private Sector Banks with High FD Rates
Private banks are a great choice for stable yet high-yielding FDs:
- Bandhan Bank – 8.05% (1 year)
- RBL Bank – 8.00% (500 days)
- IDFC First Bank – 7.90% (400-500 days)
These banks are reliable and have competitive interest rates compared to larger public-sector banks.
3. Public Sector Banks with Strong Stability
If you prioritize security and stability, PSBs offer the best balance between returns and safety:
- Canara Bank – 7.40% (3-5 years)
- Bank of Baroda – 7.30% (400 days)
- State Bank of India (SBI) – 7.25% (444 days)
Public sector banks are preferred for their safety and extensive branch networks.
4. NBFC Fixed Deposits – High Returns with Moderate Risk
Non-Banking Financial Companies (NBFCs) offer some of the highest FD rates:
- Bajaj Finance Ltd. – 8.65%
- HDFC Housing Finance – 7.30% – 7.70%
NBFCs are riskier than banks, so always check their credit ratings before investing.
5. Foreign Banks Offering Competitive FD Rates
Some international banks also offer attractive interest rates on FDs:
- Deutsche Bank – 8.00% (1-3 years)
- HSBC Bank – 7.50% (601-699 days)
Foreign banks often provide premium banking services along with attractive FD rates.
Things to Consider Before Choosing an FD
- Interest Rate vs. Tenure – Ensure that the highest interest rate matches your desired investment period.
- Senior Citizen Benefits – Most banks offer 0.25% – 0.50% additional interest for senior citizens.
- Premature Withdrawal Terms – Some banks impose penalties for early withdrawal.
- Taxation on Interest Earned – FD interest is taxable under your income slab.
- Deposit Insurance – Deposits up to ₹5 lakh are insured under DICGC.
see also: Investing ₹25,000 Annually in Post Office PPF: How Much You Will Get on Maturity?
Highest Fixed Deposit (FD) Interest Rates in 2025 FAQs
1. Which bank gives the highest FD interest rate in 2025?
Currently, North East Small Finance Bank offers the highest rate at 9.00% for 3 years.
2. Are FD returns taxable?
Yes, FD interest is taxable under Income Tax Act, 1961, and TDS (Tax Deducted at Source) applies if interest exceeds ₹40,000 (₹50,000 for senior citizens).
3. Is it safe to invest in small finance banks?
Yes, up to ₹5 lakh is insured by DICGC. However, it’s advisable to check the bank’s financial health.
4. What is the minimum amount required to open an FD?
Most banks require a minimum deposit of ₹1,000, but it varies by bank.
5. Can I withdraw my FD before maturity?
Yes, but most banks charge a penalty on premature withdrawals.
