Banks Offering More Than 7% Interest on FDs in 2026
With changes in RBI repo rates, banks in India no longer offer 9%+ FD rates. However, leading banks now provide FD interest rates starting from 7.00%, making them a reliable investment option with benefits like high liquidity, premature withdrawal, nomination, and loan/overdraft facilities.
List of Financial Institutions Offering More Than 7% Interest on FD
There are several banks and non-banking financial companies (NBFCs) that are currently offering higher fixed deposit (FD) interest rates. Here is a list of financial institutions providing attractive FD returns for both regular and senior citizen investors:
Private Banks
Bank Name | Regular FD Rate (per annum) | Senior Citizen FD Rate (per annum) |
Bandhan Bank | 7.55% | 7.95% |
City Union Bank | 7.25% | 7.50% |
CSB Bank | 7.35% | 7.50% |
Dhanlaxmi Bank | 7.25% | 7.75% |
IDFC FIRST Bank | 7.35% | 7.60% |
Jammu & Kashmir Bank | 7.30% | 7.80% |
Tamilnad Mercantile Bank | 7.25% | 7.70% |
RBL Bank | 7.20% | 7.70% |
Yes Bank | 7.25% | 7.75% |
Small Finance Banks
Small Finance Banks | Regular FD Rate (per annum) | Senior Citizen FD Rate (per annum) |
AU Small Finance Bank | 7.40% | 7.90% |
ESAF Small Finance Bank | 7.75% | 7.25% |
Equitas Small Finance Bank | 8.00% | 8.50% |
Jana Small Finance Bank | 8.00% | 8.50% |
Shivalik Small Finance Bank | 8.00% | 8.50% |
Suryoday Small Finance Bank | 8.10% | 8.50% |
Unity Small Finance Bank | 7.80% | 8.30% |
Utkarsh Small Finance Bank | 8.10% | 8.25% |
Ujjivan Small Finance Bank | 7.80% | 8.30% |
Non-Banking Financial Companies
NBFC | Regular FD Rate (per annum) | Senior Citizen FD Rate (per annum) |
Bajaj Finance | 7.40% | 7.75% |
ICICI Home Finance | 7.10% | 7.45% |
Manipal Housing Finance | 8.25% | 8.50% |
Muthoot Capital Services | 9.10% | 9.35% |
Shriram Finance | 7.25% | 7.75% |
*Interest rates are subject to change and can be revised from time to time at the discretion of the bank.
How to Calculate Interest Rate Per Month?
You can calculate the maturity amount of a Fixed Deposit using the formula given below:
M = P+ P {(1 + i/100) t-1}
Where:
- P denotes the principal amount.
- i denotes the interest rate per period.
- t denotes the tenure.
Similarly, you can determine the interest earned on a bank Fixed Deposit (FD) using mathematical formulas, akin to calculating the maturity amount.
FD Earnings Taxation
- You can claim a tax deduction under Section 80C of the Income Tax Act by investing up to Rs.1.5 lakh in a tax-saver fixed deposit account.
- This scheme offers assured returns while safeguarding your capital.
- However, it's important to note that the interest income generated from this account is fully taxable.
- The tax liability depends on your total income for the financial year and the tax bracket you fall into, with interest income categorized under 'Income from Other Sources'.
- Additionally, banks are mandated to deduct tax at source if the interest earned exceeds Rs.50,000 in a financial year across all accounts held with the bank (as of April 2025; Rs.1,00,000 for senior citizens).
- A Tax Deducted at Source (TDS) certificate will be issued to confirm the deduction details.
Fixed Deposits with Tax Savings
- Under the Income Tax Act, individuals and Hindu Undivided Families (HUFs) are eligible to invest in tax-saving FD schemes.
- However, Non-Resident Indians (NRIs) are not eligible to invest in tax-saving FDs in India.
- These FDs typically have a lock-in period of 5 years, prohibiting premature withdrawals.
- Investors can opt for FDs through any public or private bank, excluding rural and cooperative banks, and Post Office Time Deposits with a 5-year tenure qualify for tax deductions.
- FDs can be held individually or jointly, with the tax benefit granted to the first holder in the case of joint FDs.
- Furthermore, senior citizens are often offered higher interest rates on FDs, including tax-saving FDs.
FAQs on Banks Offering more than 7% interest on FD
- Can I open an FD account online?
You can open a fixed deposit account online through the bank’s net banking or by downloading the bank’s application (if any).
- What documents are required to open Fixed Deposits?
To open an FD account, you need identity proof, address proof, and recently clicked passport-sized photographs.
- What are the tenures offered by banks on fixed deposits?
Banks usually offer tenures ranging from 7 days to 10 years on fixed deposits.
- Does ESAF Small Finance Bank offer an auto-renewal facility on its fixed deposits?
Yes, ESAF Small Finance Bank offers an auto-renewal facility on its fixed deposits.
- Can minors open a fixed deposit with Mahaveer Bank?
Yes, minors can open a fixed deposit with Mahaveer Bank.
- Can I withdraw my fixed deposit before maturity?
Yes, you can withdraw your fixed deposit before maturity.
Prerna Surana is a Finance Content Writer with over three years of experience at Bank Bazaar. She specialises in creating insightful content on Credit Cards, Debit Cards, Taxes, and other BFSI products. Beyond finance, Prerna also writes about non-financial utility products such as Aadhar Card, Voter ID, and Government Certificates.
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