Fixed Deposits (FDs) remain one of the most secure and reliable investment options, especially for risk-averse investors. But before committing your money, it’s crucial to know which bank offers the highest FD interest rates. With various banks competing for depositors, interest rates can significantly vary.
To help you make an informed decision, this guide covers the highest FD interest rates in 2025, factors affecting FD returns, and expert tips to maximize your investment.
Highest FD Interest Rates in 2025
| Feature | Details |
|---|---|
| Highest FD Rate (General Citizens) | Up to 8.60% (Suryoday Small Finance Bank) |
| Highest FD Rate (Senior Citizens) | Up to 9.10% (Suryoday Small Finance Bank) |
| Best tenure for high returns | 12-24 months (varies by bank) |
| Safe & Popular Banks | ICICI, HDFC, SBI, IDFC FIRST, Ujjivan SFB |
| Small Finance Bank Rates | Typically higher than large banks |
| RBI Deposit Insurance | Up to ₹5 lakh per account holder |
Fixed Deposits remain one of the safest and most predictable investment options in 2025. While small finance banks offer the highest FD interest rates, large banks provide stability. Before choosing an FD, consider safety, tenure, tax implications, and payout frequency.
For higher returns, compare rates regularly and opt for shorter tenures (1-3 years). And always check for the latest rates on the official bank websites.
Best FD Interest Rates in 2025
Below is a list of banks offering the highest fixed deposit rates in India as of February 2025:
1. Small Finance Banks (Highest Returns)
Small finance banks typically offer the highest FD rates. However, investors should check the bank’s credibility before investing large sums.
| Bank | Interest Rate (General) | Interest Rate (Senior Citizens) | Best Tenure |
|---|---|---|---|
| Suryoday Small Finance Bank | 8.60% | 9.10% | 2-3 years |
| Ujjivan Small Finance Bank | 8.25% | 8.75% | 18 months |
| Jana Small Finance Bank | 8.10% | 8.60% | 2 years |
2. Private Sector Banks (Safe & Competitive Rates)
These banks offer reliable FD options with relatively high interest rates and strong credibility.
| Bank | Interest Rate (General) | Interest Rate (Senior Citizens) | Best Tenure |
|---|---|---|---|
| IDFC FIRST Bank | 7.90% | 8.40% | 400 days |
| HDFC Bank | 7.40% | 7.90% | 55 months |
| ICICI Bank | 7.25% | 7.85% | 15-18 months |
3. Public Sector Banks (Lower Risk, Lower Returns)
Public sector banks are government-backed, making them extremely safe, but they generally offer lower interest rates.
| Bank | Interest Rate (General) | Interest Rate (Senior Citizens) | Best Tenure |
|---|---|---|---|
| State Bank of India (SBI) | 6.50% | 7.00% | 5 years |
| Bank of Baroda | 6.75% | 7.25% | 3 years |
| Punjab National Bank (PNB) | 6.75% | 7.25% | 3 years |
How to Choose the Best FD?
Before opening an FD, consider these important factors:
1. Interest Rates & Tenure
- Short-term FDs (6-12 months) offer lower rates.
- Medium-term (1-3 years) fetch the highest interest.
- Long-term (5+ years) lock in rates but may offer lower returns.
2. Bank Safety & RBI Insurance
- Choose reputed banks with high CRISIL ratings.
- All banks are covered by DICGC insurance up to ₹5 lakh per depositor.
3. Interest Payout Frequency
Which Bank is Offering the Highest Interest Rate on Fixed Deposits? SBI, PNB, ICICI, or HDFC?
- Cumulative FD: Best for wealth growth (compounded interest reinvested).
- Monthly/Quarterly FD: Ideal for regular income seekers.
4. Taxation on FD Interest
- Interest is fully taxable as per your income slab.
- Use Form 15G/15H (if eligible) to avoid TDS deductions.
- Consider Tax-Saving FDs (5-year lock-in) for Section 80C benefits.
see also: People who do FD have a lot of fun, RBI changed the rules
How to Open an FD Online?
Opening an FD is simple and takes only a few minutes. Follow these steps:
- Visit the bank’s official website or log in to your net banking.
- Select ‘Open Fixed Deposit’ under the deposits section.
- Choose the amount & tenure that suits your investment goal.
- Pick the interest payout option (cumulative or periodic payout).
- Submit the application and complete the payment online.
- Download the FD receipt for future reference.
see also: Post Office Scheme You will get Rs 2,32,044 if you deposit money for just 2 years
Highest FD Interest Rates in 2025 FAQs
1. Which bank gives the highest FD interest rate in 2025?
Currently, Suryoday Small Finance Bank offers the highest rate at 8.60% for general citizens and 9.10% for senior citizens.
2. Are small finance banks safe for FDs?
Yes, they are regulated by RBI and covered under DICGC deposit insurance (up to ₹5 lakh). However, investors should diversify their deposits.
3. What is the best tenure for FD?
Tenures between 1-3 years typically offer the highest returns.
4. Can I break my FD before maturity?
Yes, but a penalty (0.5%-1%) may be applied on premature withdrawals.
5. How can I avoid TDS on FD interest?
Submit Form 15G/15H (if your annual income is below the taxable limit) to avoid TDS deductions.
