Fixed deposits (FDs) remain one of the most trusted investment options for individuals seeking safe and guaranteed returns. With banks and financial institutions offering high FD interest rates in 2025, investors are on the lookout for the best deposit schemes to grow their wealth.
Best Fixed Deposit Interest Rates in 2025
| Feature | Details |
|---|---|
| Highest FD Rate for Seniors | Up to 9.10% p.a. (Suryoday Small Finance Bank) |
| Highest FD Rate for General Citizens | Up to 8.60% p.a. |
| Top Banks for High FD Returns | Ujjivan SFB, Shivalik SFB, Karnataka Bank, City Union Bank |
| Tenures Offering Maximum Interest | 12 months to 5 years |
Fixed Deposits remain a reliable investment option for 2025, offering secure and steady returns. With banks like Suryoday, Ujjivan, and Shivalik Small Finance Banks offering high FD interest rates, investors can maximize their earnings by choosing the right bank and tenure. Always compare FD rates, check for premature withdrawal penalties, and consider tax-saving options before investing.
Why Fixed Deposits Are a Smart Investment Choice in 2025
Fixed deposits have remained one of the safest investment avenues, especially for risk-averse investors. Here’s why they continue to be a great choice:
- Guaranteed Returns: Unlike market-linked investments, FDs offer fixed interest rates.
- Low Risk: Backed by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5 lakh per bank.
- Flexible Tenures: Ranging from 7 days to 10 years, allowing investors to choose as per their needs.
- Senior Citizen Benefits: Banks provide an additional interest rate (0.5% – 0.75%) for senior citizens.
see also: Big Changes for Fixed Deposit Holders, Full Details
Best Fixed Deposit Interest Rates in 2025
1. Highest FD Interest Rates for Senior Citizens
| Bank | Interest Rate (%) | Tenure |
|---|---|---|
| Suryoday Small Finance Bank | 9.10% | 5 Years |
| Shivalik Small Finance Bank | 9.05% | 12 months – 18 months |
| Ujjivan Small Finance Bank | 8.75% | 18 Months |
| City Union Bank | 8.00% | 333 Days |
| Karnataka Bank | 8.00% | 401 Days |
2. Highest FD Interest Rates for General Citizens
| Bank | Interest Rate (%) | Tenure |
|---|---|---|
| Suryoday Small Finance Bank | 8.60% | 5 Years |
| Shivalik Small Finance Bank | 8.55% | 12 months – 18 months |
| Ujjivan Small Finance Bank | 8.25% | 18 Months |
| City Union Bank | 7.50% | 333 Days |
| Karnataka Bank | 7.50% | 401 Days |
How to Choose the Best Fixed Deposit?
If you’re planning to invest in FDs, here are four key factors to consider:
1. Interest Rate Comparison
Not all banks offer the same interest rates. Compare across multiple banks and financial institutions to find the highest return.
2. Tenure Selection
The best FD rates are usually offered for mid-term tenures (1-5 years). Opt for a duration that aligns with your financial goals.
3. Premature Withdrawal Terms
Some banks charge high penalties on early withdrawals. If liquidity is a concern, choose a bank with flexible withdrawal terms.
4. Taxation on FD Interest
Interest earned on FDs is taxable as per your income slab. Consider investing in tax-saving FDs under Section 80C for additional benefits.
Step-by-Step Guide to Opening a Fixed Deposit
Step 1: Choose Your Bank
- Visit the official website or nearest branch.
- Compare FD interest rates and tenure options.
Step 2: Submit Your Documents
- KYC Documents: Aadhaar Card, PAN Card, and Address Proof.
- Bank Account Details (if opening online, Net Banking credentials are required).
Step 3: Select Deposit Amount and Tenure
- Enter the deposit amount (minimum starts at ₹1,000 in most banks).
- Choose the tenure offering maximum returns.
Step 4: Confirm and Start Earning
- Review interest rate and maturity details.
- Receive an FD receipt confirming your investment.
see also: Maximize Your Earnings: Which Banks Offer the Best FD Interest Rates?
Best Fixed Deposit Interest Rates in 2025 FAQs
1. Which bank gives the highest FD interest rate in 2025?
As of February 2025, Suryoday Small Finance Bank offers the highest FD rate of 9.10% for senior citizens and 8.60% for general investors.
2. Are small finance banks safe for FD investments?
Yes, small finance banks are regulated by the Reserve Bank of India (RBI), and deposits up to ₹5 lakh are insured under DICGC.
3. What is the best FD tenure for maximum interest?
Most banks offer the highest interest rates for tenures between 1 to 5 years.
4. How is FD interest taxed?
FD interest is taxable under “Income from Other Sources” and is subject to TDS (Tax Deducted at Source) if it exceeds ₹40,000 in a financial year (₹50,000 for seniors).
5. Can I break my FD before maturity?
Yes, but banks may charge a penalty of 0.5% – 1% on the applicable interest rate.
