When it comes to safe and guaranteed returns, Fixed Deposits (FDs) have long been the go-to investment option for millions of Indians. But did you know that some banks are offering as high as 9% FD interest rates in 2025? Before parking your money, it’s essential to know which banks offer the highest FD interest rates to maximize your returns.
In this detailed guide, we will break down the latest FD interest rates offered by top Indian banks, highlight the highest-paying banks, and provide practical advice to help you make an informed investment decision.
Highest FD Interest Rates in India
| Details | Information |
|---|---|
| Top Bank with Highest FD Rate | Unity Small Finance Bank & NorthEast Small Finance Bank – 9.00% p.a. |
| Top Private Sector Bank Rate | DCB Bank – 8.05% p.a. |
| Top Public Sector Bank Rate | Central Bank of India – 7.50% p.a. |
| Tenure for Maximum Interest | Generally ranges from 1 year to 3 years |
| Special Senior Citizen Rates | Additional 0.50% to 0.75% interest for senior citizens |
| Important Consideration | Small Finance Banks offer higher rates but check their financial stability |
In 2025, with inflation and interest rate cycles changing, FDs remain a reliable, low-risk investment option. Unity Small Finance Bank, NorthEast Small Finance Bank, and DCB Bank currently offer the best FD interest rates, especially for short-to-medium-term investments. Always assess the financial health of the bank and your liquidity needs before investing.
Understanding Fixed Deposits (FDs): A Quick Overview
A Fixed Deposit (FD) is a financial instrument where you deposit a lump sum with a bank for a fixed tenure at a predetermined interest rate. It’s considered a low-risk investment, ideal for conservative investors, retirees, and anyone looking for stable returns.
Why do people prefer FDs?
- Guaranteed returns – irrespective of market fluctuations.
- Flexible tenures – from 7 days to 10 years.
- Premature withdrawal option – with minor penalties.
- Loan facility – borrow against FD without breaking it.
see also: Post Office FD Interest Rate Will Change from April 1
Top 7 Banks Offering the Highest FD Interest Rates in March 2025
Let’s take a closer look at the highest FD interest rates currently offered by prominent Indian banks:
1. Unity Small Finance Bank – 9.00% p.a.
- Tenure: 1001 days
- Regular Rate: 9.00% p.a.
- Senior Citizens Rate: 9.50% p.a.
Unity SFB tops the list with a whopping 9% return. However, before investing, ensure the bank’s financial health is satisfactory by checking ratings from agencies like CRISIL.
2. NorthEast Small Finance Bank – 9.00% p.a.
- Tenure: 18 months 1 day to 36 months
- Regular Rate: 9.00% p.a.
- Senior Citizens Rate: 9.50% p.a.
This bank caters predominantly to customers in the northeastern region of India, offering competitive FD rates.
3. Suryoday Small Finance Bank – 8.60% p.a.
- Tenure: 5 years
- Regular Rate: 8.60% p.a.
- Senior Citizens Rate: 9.10% p.a.
Long-term investors will find this rate attractive for wealth building.
4. Utkarsh Small Finance Bank – 8.50% p.a.
- Tenure: 2 to 3 years; special 1500 days scheme
- Regular Rate: 8.50% p.a.
- Senior Citizens Rate: 9.00% p.a.
5. DCB Bank – 8.05% p.a. (Private Sector)
- Tenure: 19 to 20 months
- Regular Rate: 8.05% p.a.
- Senior Citizens Rate: 8.55% p.a.
One of the highest in the private sector, DCB Bank is a stable option for professionals looking for short-to-medium-term investment.
6. Central Bank of India – 7.50% p.a. (Public Sector)
- Tenure: 1111 days
- Regular Rate: 7.50% p.a.
- Senior Citizens Rate: 8.00% p.a.
A government-backed bank, Central Bank provides stability and assurance alongside attractive returns.
7. Axis Bank – 7.75% p.a. (For Senior Citizens)
- Tenure: Up to 10 years
- Regular Rate: 7.10% p.a.
- Senior Citizens Rate: 7.75% p.a.
Ideal for retirement planning, Axis Bank offers one of the best long-term FD rates for senior citizens.
How to Choose the Right FD: Practical Tips
Choosing the right FD requires more than just looking at the interest rate. Here are 5 practical tips:
1. Compare Interest Rates Across Banks
Post Office RD Scheme: हर महीने जमा करें 3 हजार रुपये, पाएं इतना रिटर्न, देखें पूरी डिटेल
Use platforms like BankBazaar or RBI’s database to compare rates regularly.
2. Check Credit Ratings
Opt for banks with higher CRISIL, ICRA, or CARE ratings. Small Finance Banks may offer higher returns but carry slightly higher risk.
3. Consider Tenure & Lock-in Period
Align the FD tenure with your financial goals. Longer tenure = higher rate but less liquidity.
4. Senior Citizen Benefits
If you’re 60+, avail senior citizen special rates that give up to 0.75% extra returns.
5. Evaluate Penalty Clauses
Before premature withdrawals, understand the penalty (usually 0.5% to 1% reduction in interest).
see also: Depositing Rs 1 Lakh to Rs 10 Lakh in Post Office FD for 5 Years
Highest Interest Rate on FD FAQs
1. Are FDs in Small Finance Banks safe?
Yes, but check the bank’s stability and credit rating. Also, deposits up to ₹5 lakh are insured under DICGC insurance.
2. Can I withdraw my FD prematurely?
Yes. However, most banks charge a penalty of 0.5%-1% on interest for early withdrawals.
3. Is the interest earned on FD taxable?
Yes. Interest above ₹40,000 (₹50,000 for senior citizens) annually is subject to TDS at 10%. Use Form 15G/15H to avoid TDS if income is below the taxable limit.
4. Which bank is best for senior citizen FDs in 2025?
Currently, Axis Bank (7.75%), HDFC Bank (7.50%), and Central Bank (8.00%) are offering some of the highest FD rates for senior citizens.
5. Can NRIs invest in these FDs?
Yes, NRIs can invest in NRE/NRO FDs, but interest rates and tax implications differ.
