If you’re looking for a safe and rewarding way to grow your savings, then exploring the top 3 banks offering the highest FD interest rates is a smart move. Fixed Deposits (FDs) are one of the most trusted investment options in India, and banks are now offering attractive interest rates that can help you earn more without taking on high risk.
As of April 2025, some small finance banks are offering FD interest rates as high as 9%, making them a popular choice for investors, especially those who want guaranteed returns. In this article, we break down the top 3 banks with the highest FD rates, help you understand what makes them appealing, and guide you on how to make the most of your investment.
Top 3 Banks Offering the Highest FD Interest Rates
| Feature | Details |
|---|---|
| Top FD Rate | 9.00% p.a. by North East Small Finance Bank |
| Other High FD Rates | Suryoday SFB: 8.60% |
| Highest Tenure Returns | North East SFB (18 months 1 day to 3 years) |
| Type of Banks | Small Finance Banks |
| Why Choose FDs | Safe, fixed returns, low risk |
When it comes to safe investment options with attractive returns, fixed deposits are still a top choice for many Indians. In April 2025, the highest FD interest rate is being offered by North East Small Finance Bank at 9%, making it an excellent opportunity for both new and experienced investors.
Always remember to match your FD choice with your financial goals, tenure preference, and risk appetite. And never forget to verify the latest interest rates directly from the bank’s official website or branch before investing.
What Are Fixed Deposits (FDs)?
A Fixed Deposit is a financial instrument provided by banks that allows you to deposit a lump sum amount for a fixed period at a pre-determined interest rate. Once the FD matures, you receive your principal amount along with the accrued interest.
FDs are ideal for those who:
- Want guaranteed returns
- Prefer low-risk investments
- Seek flexibility in tenure (ranging from 7 days to 10 years)
Unlike mutual funds or stocks, the return is not market-linked, which means your capital is protected.
see also: More Benefits on FD from Today: What Does Increasing the TDS Limit to ₹50,000 Mean?
Top 3 Banks Offering the Highest FD Interest Rates in April 2025
Let’s look at the banks currently leading the FD interest rate charts:
1. North East Small Finance Bank (SFB) – Interest Rate: 9.00% p.a.
- Tenure: 18 months 1 day to 3 years
- Interest for Senior Citizens: Up to 9.50%
- Minimum Deposit: Usually ₹1,000
- Premature Withdrawal: Allowed, with penalty
North East SFB currently holds the top spot in the FD race, offering 9% interest for medium-term deposits. This is significantly higher than what most public and private sector banks are offering.
Example: If you invest ₹1,00,000 for 3 years, you can earn up to ₹30,000 in interest.
2. Suryoday Small Finance Bank – Interest Rate: 8.60% p.a.
- Tenure: 5 years
- Senior Citizen Rate: 9.10%
- Minimum Deposit: ₹1,000
- Premature Withdrawal: Allowed, terms apply
Suryoday SFB is another high-yielding option, especially for long-term investors. It is also covered by DICGC insurance (up to ₹5 lakh), ensuring safety of your principal.
3. Unity Small Finance Bank – Interest Rate: 8.60% p.a.
- Tenure: 1001 days (special scheme)
- Senior Citizen Rate: 9.10%
- Minimum Deposit: ₹1,000
Unity SFB’s special FD scheme is popular among investors who want higher returns for a unique term. The 1001-day FD is a limited-time offer and ideal for those planning for medium-term goals.
Why Are Small Finance Banks Offering Higher FD Rates?
Small finance banks (SFBs) often offer higher interest rates compared to major banks to attract more customers and increase their deposit base. These banks cater to niche segments and use FD inflows to fund their lending operations.
Is it safe to invest? Yes, as long as the bank is regulated by the Reserve Bank of India (RBI) and covered by DICGC insurance, your deposits up to ₹5 lakh are safe.
Tips to Maximize Returns from Fixed Deposits
1. Choose the Right Bank and Tenure
Go for banks offering the highest rates for the tenure that matches your financial goal.
2. Opt for Cumulative FDs
पोस्ट ऑफिस महिला सम्मान सेविंग सर्टिफिकेट (MSSC) 2025: महिलाओं के लिए सर्वश्रेष्ठ बचत योजना
Cumulative FDs pay interest at maturity, allowing you to benefit from compounding.
3. Consider Laddering Strategy
Split your FD amount across multiple tenures. This improves liquidity and returns.
4. Senior Citizens: Claim Extra Interest
If you’re 60 or older, most banks offer 0.25% to 0.75% extra interest.
5. Check Premature Withdrawal Terms
Some banks charge penalties. Read the terms and conditions before investing.
Comparison with FD Rates of Major Banks (April 2025)
| Bank Name | Max FD Rate (General) | Max FD Rate (Senior Citizens) |
|---|---|---|
| SBI | 7.10% | 7.60% |
| HDFC Bank | 7.25% | 7.75% |
| ICICI Bank | 7.20% | 7.70% |
| Axis Bank | 7.10% | 7.60% |
| North East SFB | 9.00% | 9.50% |
| Suryoday SFB | 8.60% | 9.10% |
| Unity SFB | 8.60% | 9.10% |
As you can see, small finance banks offer significantly higher returns, especially useful for retirees and conservative investors.
see also: Post Office’s Most Popular Scheme: Become the Owner of ₹35 Lakhs by Depositing ₹35 Daily
Highest FD Interest Rates FAQs
Q. Is it safe to invest in small finance banks?
Yes. As long as the bank is RBI-regulated and DICGC-insured, your deposits up to ₹5 lakh are protected.
Q. Can I break an FD before maturity?
Yes, most banks allow premature withdrawal, but may charge a penalty or offer a lower interest rate.
Q. How is FD interest taxed?
FD interest is taxable under “Income from Other Sources.” Banks deduct TDS at 10% if interest exceeds ₹50,000 (for non-seniors).
Q. What is the minimum amount to open an FD?
Most banks require a minimum of ₹1,000, though it can vary by institution.
Q. Are online FD investments available?
Absolutely. All major and small finance banks now allow FD booking through mobile apps and net banking.
