Fixed deposits (FDs) remain one of the safest and most reliable investment options, particularly for those seeking stable returns with minimal risk. Recently, three banks have revised their FD interest rates, with some now offering up to 9.10% for senior citizens. This change has attracted both short-term and long-term investors looking to maximize their savings.
If you’re considering opening an FD or renewing an existing one, this article will provide all the necessary details to help you make an informed decision.
FD Interest Rate
| Feature | Details |
|---|---|
| Highest Interest Rate | 9.10% for senior citizens |
| Banks Offering Revised Rates | Suryoday Small Finance Bank, Shivalik Small Finance Bank, Ujjivan Small Finance Bank |
| General FD Rates | Up to 8.60% |
| Best Tenure for Maximum Returns | 12 months to 5 years |
| Effective Date of Changes | February 2025 |
With revised FD interest rates offering up to 9.10%, now is an excellent time for investors to capitalize on higher returns. Small finance banks like Suryoday, Shivalik, and Ujjivan are leading the way with competitive rates. Before investing, compare different banks, consider your liquidity needs, and ensure that the bank is RBI-regulated for safety.
Why Are FD Interest Rates Changing?
Banks adjust fixed deposit interest rates based on several factors, including monetary policy decisions by the Reserve Bank of India (RBI), inflation, liquidity, and competition in the banking sector. Recently, the RBI made a 25 basis points cut in the repo rate, bringing it down to 6.25%, impacting the deposit and lending rates across banks. However, small finance banks are offering attractive rates to attract more customers.
see also: Highest FD Interest Rates in 2025 Where to Get the Best Returns?
Which Banks Have Increased FD Interest Rates?
1. Suryoday Small Finance Bank
- For General Citizens: Up to 8.60%
- For Senior Citizens: Up to 9.10%
- Tenure: 5 years
- Effective Date: February 1, 2025
Suryoday Small Finance Bank has consistently offered higher-than-average interest rates to attract depositors, particularly senior citizens who depend on interest income for financial security.
2. Shivalik Small Finance Bank
- For General Citizens: Up to 8.55%
- For Senior Citizens: Up to 9.05%
- Tenure: 12 months and 1 day to less than 18 months
- Effective Date: February 18, 2025
Shivalik Small Finance Bank’s rate increase is targeted at short-term depositors, making it an attractive option for those who want liquidity with high returns.
3. Ujjivan Small Finance Bank
- For General Citizens: Up to 8.25%
- For Senior Citizens: Up to 8.75%
- Tenure: 18 months
- Effective Date: February 21, 2025
Ujjivan Bank has kept its interest rates competitive, focusing on medium-term depositors who seek higher returns with moderate commitment.
How to Choose the Right FD?
Before investing in an FD, consider these key factors:
1. Interest Rate Trends
- Check the latest FD interest rates on the bank’s website.
- Compare rates across multiple banks before locking in your investment.
2. Tenure & Liquidity Needs
- If you need liquidity, opt for a short-term FD (12-18 months).
- If you can commit for a longer duration, choose 5-year FDs for maximum interest.
3. Bank Reputation & Safety
- Choose banks with strong financial stability.
- Small finance banks offer higher rates but ensure they are RBI regulated.
4. Tax Implications
- FD interest income is taxable under “Income from Other Sources”.
- Consider a Tax-Saving FD (5-year lock-in) for tax deductions under Section 80C.
Step-by-Step Guide to Opening an FD Online
- Choose a Bank – Compare interest rates and select the best option.
- Visit the Official Website – Go to the bank’s FD section.
- Login to Your Account – Use your net banking credentials.
- Select FD Type – Choose tenure and interest payout mode (monthly, quarterly, or cumulative).
- Enter Deposit Amount – Specify your investment amount.
- Verify & Submit – Complete KYC verification if required.
- Receive Confirmation – A digital FD receipt is generated instantly.
see also: People who do FD have a lot of fun, RBI changed the rules
FD Interest Rate FAQs
1. Are FD interest rates expected to go higher in 2025?
Interest rates depend on RBI policies, inflation, and banking liquidity. While small finance banks are currently offering high rates, mainstream banks might adjust rates based on RBI decisions.
2. Is it safe to invest in small finance banks?
Yes, as long as they are RBI regulated. Also, deposits up to ₹5 lakh per bank are insured under DICGC insurance.
3. Can I withdraw my FD before maturity?
Yes, but a penalty fee applies. Always check the premature withdrawal terms before investing.
4. How can I maximize FD returns?
- Invest in high-interest FDs.
- Opt for cumulative interest instead of monthly payouts.
- Ladder FDs to balance liquidity and returns.
5. What is the best FD tenure for senior citizens?
For maximum interest, opt for 5-year FDs, which also qualify for tax-saving benefits.
