Best FD Rates India 2026 — Bank-Wise Interest Rate Comparison
Fixed Deposits remain India's most popular safe investment. But FD rates vary significantly across banks — the difference between the highest and lowest rate can be 1.5-2%. This guide compares the latest FD rates from major banks, small finance banks, and post offices to help you get the best return on your money.
Top Bank FD Rates — General Citizens (April 2026)
FD rates for 1-year to 3-year tenure (most popular). Rates are for amounts below ₹2 crore.
| Bank | 1 Year | 2 Years | 3 Years | 5 Years (Tax Saver) |
|---|---|---|---|---|
| SBI | 6.80% | 7.00% | 6.75% | 6.50% |
| HDFC Bank | 6.60% | 7.25% | 7.15% | 7.00% |
| ICICI Bank | 6.70% | 7.20% | 7.10% | 7.00% |
| Axis Bank | 6.70% | 7.10% | 7.10% | 7.00% |
| Kotak Mahindra | 6.20% | 7.15% | 7.10% | 6.20% |
| Bank of Baroda | 6.85% | 7.05% | 6.50% | 6.50% |
| PNB | 6.80% | 7.05% | 6.50% | 6.50% |
| Canara Bank | 6.85% | 7.00% | 6.50% | 6.50% |
| IndusInd Bank | 7.25% | 7.75% | 7.25% | 7.25% |
| Yes Bank | 7.25% | 7.50% | 7.25% | 7.00% |
Small Finance Bank FD Rates (Higher Returns)
Small finance banks often offer 0.5-1.5% higher rates than large banks. Deposits up to ₹5 lakh are DICGC insured — equally safe as SBI.
| Bank | 1 Year | 2 Years | 3 Years | 5 Years |
|---|---|---|---|---|
| Unity SFB | 8.00% | 8.00% | 7.75% | 7.50% |
| Utkarsh SFB | 7.80% | 8.00% | 7.50% | 7.50% |
| AU Small Finance | 7.25% | 7.50% | 7.50% | 7.25% |
| Equitas SFB | 7.50% | 7.50% | 7.25% | 7.00% |
| Ujjivan SFB | 7.30% | 7.50% | 7.25% | 7.00% |
| Jana SFB | 7.25% | 7.75% | 7.50% | 7.25% |
Senior Citizen FD Rates (Extra 0.25-0.75%)
Senior citizens (age 60+) get additional interest above regular rates. Super senior citizens (80+) may get even higher at some banks.
| Bank | Regular Rate (2Y) | Senior Citizen Rate (2Y) | Extra Benefit |
|---|---|---|---|
| SBI | 7.00% | 7.50% | +0.50% |
| HDFC Bank | 7.25% | 7.75% | +0.50% |
| ICICI Bank | 7.20% | 7.70% | +0.50% |
| Post Office TD | 7.00% | 7.00% | No extra |
| SCSS | 8.20% | 8.20% | Only for 60+ |
Pro tip for seniors: SCSS at 8.2% beats almost every bank FD for senior citizens. Invest up to ₹30 lakh in SCSS first, then put remaining in FDs.
Tax-Saving FDs (Section 80C)
Tax-saving FDs have a 5-year lock-in period. You can claim deduction up to ₹1.5 lakh under Section 80C. However, the interest earned is fully taxable at your slab rate.
- Lock-in: 5 years (no premature withdrawal allowed)
- Maximum deduction: ₹1.5 lakh under Section 80C
- Joint account: Only first holder gets 80C benefit
- Interest: Fully taxable at slab rate (TDS applicable)
- Nomination: Available at all banks
How FD Interest is Taxed
| Scenario | Tax Treatment |
|---|---|
| Total FD interest < ₹40,000/year (per bank) | No TDS deducted, but interest is taxable |
| Total FD interest > ₹40,000/year | Bank deducts 10% TDS |
| Senior citizen interest < ₹50,000/year | No TDS (higher threshold for seniors) |
| PAN not submitted | 20% TDS deducted |
| Total income below taxable limit | Submit Form 15G (or 15H for seniors) to avoid TDS |
Use our Income Tax Calculator to check if your FD interest pushes you into a higher tax bracket.
Tips to Maximise FD Returns
- FD laddering: Instead of putting all money in one FD, split across 1-year, 2-year, 3-year, and 5-year FDs. This gives you liquidity while earning higher rates on longer tenures.
- Compare small finance banks: DICGC insures up to ₹5 lakh per bank. For amounts within this limit, small finance bank FDs at 7.5-8.5% are equally safe as SBI.
- Cumulative vs non-cumulative: Choose cumulative FDs for wealth building (interest compounds). Choose non-cumulative for regular income (monthly/quarterly payouts).
- Avoid premature withdrawal: Most banks charge a 0.5-1% penalty on premature withdrawal. If you might need money before maturity, use shorter tenure FDs instead.
- Consider post-tax returns: At 30% tax bracket, a 7% FD gives only 4.9% post-tax. At this point, PPF (7.1% tax-free) or debt mutual funds may give better returns.
FD vs Other Fixed Income Options
| Feature | Bank FD | PPF | SCSS | Debt Mutual Fund |
|---|---|---|---|---|
| Interest rate | 6.5-8.5% | 7.1% | 8.2% | 6-8% (variable) |
| Safety | DICGC insured (₹5L) | Govt guarantee | Govt guarantee | Market-linked |
| Lock-in | Flexible (7 days-10 yrs) | 15 years | 5 years | No lock-in |
| Tax on interest | Slab rate | Tax-free (EEE) | Slab rate | Slab rate |
| 80C benefit | Only 5-year FD | Yes (₹1.5L) | Yes (₹1.5L) | No |
| Best for | Short-term parking | Long-term savings | Senior citizens | Tax-efficient debt |
Frequently Asked Questions
Which bank gives the highest FD rate in 2026?
Small finance banks like Unity SFB and Utkarsh SFB offer up to 8.0-8.5%. Among large private banks, IndusInd Bank and Yes Bank offer competitive rates of 7.25-7.75%. Public sector banks like SBI offer 6.50-7.10%. Always check the bank's website for the latest rates as they change frequently.
Is FD interest taxable in India?
Yes, FD interest is fully taxable at your income tax slab rate. Banks deduct 10% TDS if your total interest exceeds ₹40,000/year (₹50,000 for seniors). If your total income is below the taxable limit, submit Form 15G (15H for seniors) to avoid TDS. The interest still needs to be reported in your ITR.
Are small finance bank FDs safe?
Yes, deposits up to ₹5 lakh per depositor per bank are insured by DICGC — the same protection as SBI, HDFC Bank, or any other bank. For amounts above ₹5 lakh, consider spreading across multiple banks to stay within the insurance limit, or use large PSU banks.