Small finance banks are offering the highest fixed deposit rates, with Suryoday Small Finance Bank and Utkarsh Small Finance Bank providing up to 8.1% on select deposits. According to data compiled by Stable Money, Jana Small Finance Bank is offering up to 7.77% on five-year deposits, while Shivalik Small Finance Bank is providing 7.80% on one-year and ten-month tenures. In contrast, large public-sector banks are offering rates between 6% and 6.7% on regular FDs, with State Bank of India, Punjab National Bank, and Bank of Baroda providing peak rates of around 6.45-6.6%. Private sector banks including HDFC Bank, ICICI Bank, and Axis Bank are offering between 6.45% and 6.5% on their highest-yielding tenures.
The best fixed deposit rates are concentrated in the one-to-five-year duration bucket, as reported by Stable Money. Bandhan Bank is offering 7.25% on three-year deposits, while RBL Bank is providing 7.2% on three-year deposits. Among NBFCs, Bajaj Finance is offering up to 7.4% on three-year deposits, and Shriram Finance is providing up to 7.25%. However, longer-duration FDs of 10 years generally offer lower returns across banks, with most large lenders providing close to 6-6.5% rates. IDFC First Bank is offering 7.25% on three-year deposits, while Yes Bank is providing 7% on three-year deposits.
According to Saurabh Jain, cofounder and chief executive officer of Stable Money, FD interest rates remain attractive across banks, providing investors with good opportunities to lock in higher yields for medium to long-term investments. As reported by Business Standard, Jain advises investors to focus on current opportunities rather than timing future rate movements linked to the Reserve Bank of India's monetary policy decisions. He warns that waiting purely in anticipation of rate revisions may lead to missing out on attractive FD rates currently available in the market.
Financial planners often advise investors to balance returns with safety while selecting FDs, according to Business Standard reports. Key factors to consider include the financial strength and credibility of the institution, deposit insurance coverage, liquidity needs and tenure suitability, diversifying deposits across multiple banks, and using FD laddering to manage reinvestment risk. The current market environment presents attractive opportunities for investors seeking medium to long-term fixed-income investments, with small finance banks offering particularly competitive rates compared to traditional banking institutions.
