Fixed Deposit Rates: Small Finance Banks Offer Up To 8.25%, While PSU Banks Stay Below 7%
Fixed deposits remain a popular choice for savers looking for predictable returns without exposure to market-linked fluctuations. However, the interest available on an FD can differ considerably depending on the bank and tenure selected. Current rate data shows that small finance banks are offering some of the highest rates, with selected deposits paying up to 8.25% a year. Private banks have maximum rates of up to 7.50%, while public sector banks offer up to 6.85% on certain tenures.
For depositors, the headline rate is only one part of the decision. The investment period also matters because the highest rate offered by a bank may apply to a specific tenure rather than to all its fixed deposits.
Small finance banks lead the rate comparison
Among the banks covered in the data, Suryoday Small Finance Bank has the highest listed rate at 8.25% per annum. This rate is available on a five-year FD, making the tenure an important consideration for anyone comparing returns.Utkarsh Small Finance Bank follows with a maximum rate of 8.10% for a 666-day deposit. Jana Small Finance Bank, Equitas Small Finance Bank, ESAF Small Finance Bank and Shivalik Small Finance Bank can offer rates of up to 8% on selected tenures.
Ujjivan Small Finance Bank has a maximum rate of 7.80%, while slice Small Finance Bank offers up to 7.75%. AU Small Finance Bank has a top rate of 7.40%.
The rates also vary when specific investment periods are compared. For example, Suryoday Small Finance Bank's five-year rate is 8.25%, while its one-year and three-year rates are both 7.25%.
Jana Small Finance Bank offers 7% for one year and 8% for three years, with its five-year rate at 7.77%. Equitas Small Finance Bank lists 7.10% for both one-year and three-year deposits and 7% for five years.
Here are the listed rates for selected small finance banks:
| Bank | 1-year rate | 3-year rate | 5-year rate | Highest rate |
| AU Small Finance Bank | 6.35% | 7.40% | 6.75% | 7.40% |
| Equitas Small Finance Bank | 7.10% | 7.10% | 7.00% | 8.00% |
| ESAF Small Finance Bank | 6.00% | 6.00% | 5.75% | 8.00% |
| Jana Small Finance Bank | 7.00% | 8.00% | 7.77% | 8.00% |
| Shivalik Small Finance Bank | 6.00% | 7.50% | 6.25% | 8.00% |
| slice Small Finance Bank | 6.25% | 7.50% | 7.00% | 7.75% |
| Suryoday Small Finance Bank | 7.25% | 7.25% | 8.25% | 8.25% |
| Ujjivan Small Finance Bank | 7.25% | 7.25% | 7.20% | 7.80% |
| Utkarsh Small Finance Bank | 6.00% | 7.50% | 7.00% | 8.10% |
What could ₹2 lakh become at 8.25%?
The difference between an FD's starting amount and maturity value becomes clearer when the numbers are worked out.Suppose ₹2 lakh is placed in a five-year fixed deposit earning 8.25% annually, with quarterly compounding. On the stated assumptions, the maturity value would be around ₹3.01 lakh.
That would mean total interest of approximately ₹1.01 lakh over five years. The actual maturity amount can vary depending on the bank's compounding method, applicable scheme conditions and the precise rate offered when the deposit is booked.
This example also shows why investors should look beyond the maximum rate displayed in a comparison. A higher rate may be linked to a particular tenure, while an FD with a different maturity period could carry a lower return.
Private banks offer lower maximum rates
The picture changes when private sector banks are considered. In the available rate data, DCB Bank has the highest maximum rate among the listed private banks at 7.50%.Bandhan Bank offers up to 7.45%, while RBL Bank has a maximum rate of 7.20%. IDFC FIRST Bank offers up to 7.10%, and IndusInd Bank's highest listed rate is 7%.
YES Bank offers up to 7.25%, while Kotak Mahindra Bank has a maximum rate of 6.80%. Axis Bank, HDFC Bank and ICICI Bank have maximum rates of 6.50% in the comparison.
The five-year figures also show why comparing individual tenures is important. RBL Bank offers 6.70% for five years, despite its overall maximum rate being 7.20%. DCB Bank's five-year rate stands at 7%.
For HDFC Bank and ICICI Bank, the five-year rates are 6.40% and 6.50%, respectively.
The private-bank comparison is as follows:
| Bank | 1-year rate | 3-year rate | 5-year rate | Highest rate |
| Axis Bank | 6.25% | 6.50% | 6.50% | 6.50% |
| Bandhan Bank | 7.00% | 7.25% | 5.85% | 7.45% |
| DCB Bank | 6.90% | 7.00% | 7.50% | 7.50% |
| HDFC Bank | 6.25% | 6.45% | 6.40% | 6.50% |
| ICICI Bank | 6.25% | 6.45% | 6.50% | 6.50% |
| IDFC FIRST Bank | 6.50% | 7.10% | 6.75% | 7.10% |
| IndusInd Bank | 6.75% | 7.00% | 6.65% | 7.00% |
| Kotak Mahindra Bank | 6.35% | 6.40% | 6.25% | 6.80% |
| RBL Bank | 7.00% | 7.20% | 6.70% | 7.20% |
| YES Bank | 6.65% | 7.00% | 6.75% | 7.25% |
Public sector banks have a different rate structure
Public sector banks in the comparison offer lower maximum FD rates than the highest rates available from small finance banks and several private lenders.Bank of India and Punjab & Sind Bank have the highest listed maximum rates in this group at 6.85%. Bank of Baroda and Central Bank of India offer up to 6.75%.
Indian Bank has a maximum rate of 6.65%, while Bank of Maharashtra offers up to 6.65%. Canara Bank and Indian Overseas Bank have maximum rates of 6.60%.
Punjab National Bank offers up to 6.60%, while Union Bank of India has a maximum rate of 6.55%.
State Bank of India has a maximum FD rate of 6.45% in the supplied data.
The detailed figures are:
| Bank | 1-year rate | 3-year rate | 5-year rate | Highest rate |
| Bank of Baroda | 6.25% | 6.25% | 6.30% | 6.75% |
| Bank of India | 6.50% | 6.70% | 6.00% | 6.85% |
| Bank of Maharashtra | 6.40% | 5.25% | 5.00% | 6.65% |
| Canara Bank | 6.25% | 6.25% | 6.25% | 6.60% |
| Central Bank of India | 6.10% | 6.00% | 6.00% | 6.75% |
| Indian Bank | 6.10% | 6.05% | 6.00% | 6.65% |
| Indian Overseas Bank | 6.50% | 6.10% | 6.10% | 6.60% |
| Punjab National Bank | 6.25% | 6.30% | 6.35% | 6.60% |
| Punjab & Sind Bank | 5.85% | 5.85% | 5.95% | 6.85% |
| State Bank of India | 6.25% | 6.30% | 6.05% | 6.45% |
| Union Bank of India | 6.20% | 6.10% | 6.00% | 6.55% |
The highest FD rate may not be the only consideration
A higher interest rate can increase the amount earned on a fixed deposit, but according to financial experts, depositors should also consider how long they are willing to keep their money locked in.The data shows substantial differences between one-year, three-year and five-year rates within the same bank. This means choosing an FD solely on the basis of a bank's maximum advertised rate may not give a complete picture.
Liquidity needs are another consideration. A depositor who may require the money before maturity should check the bank's rules on premature withdrawal and any applicable reduction in interest.
Tax treatment should also be considered while calculating the effective return from an FD. The interest earned may have tax implications depending on the depositor's circumstances.
For savers comparing fixed deposit interest rates in September 2026, the key numbers therefore include the rate applicable to the exact tenure, the maturity amount, the conditions attached to the deposit and the investor's own financial requirements.
The rates cited here are for the general public and are based on the supplied data dated September 16, 2026. Banks can revise FD rates, and rates may differ across specific schemes and maturities. Depositors should verify the applicable rate and terms with the concerned bank before booking an FD.
Disclaimer: This content is for informational purposes only and should not be considered financial advice. Investors should independently verify current FD rates, terms, tax implications and other applicable conditions before making any financial decision.
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