Which Bank Offers the Highest Interest Rate for FD?
Small finance banks and NBFCs pay the highest FD interest rates in India, often beating scheduled banks across one, three, four and five-year tenures. Senior citizens typically earn about 0.50% p.a. more, and tax-saving and NRI FD options are also available. The tables below list verified FD rates from top banks and NBFCs.
Senior citizens, those above 60 years of age, are often given a rate of interest which is 0.50% more than those below the age of 60. There are also Tax Saving FDs which have a lock-in period of 5 years and offer tax exemptions under Section 80C of the Income Tax Act.
FDs for Non-Resident Indians also offer non-taxable interest income in India as well as fully repatriable interest and principal amount. FDs are now offered by Non-Banking Financial Companies (NBFCs) as well as small finance banks with high rates of interest.
Banks and NBFCs Offering a Higher Rate of Return on Fixed Deposit Accounts:
These are the banks and NBFCs offering a higher rate of interest on domestic fixed deposits below Rs.2 crore across popular tenures:
Important Note:
Fincare Small Finance Bank merged with AU Small Finance Bank with effect from 1 April 2024 and no longer accepts fixed deposits as a separate entity. AU Small Finance Bank's current fixed deposit rates have been added alongside Fincare's flagged listing in the tables below.
Banks and NBFCs Offering a Higher Rate of Return Up to 3-Year Tenure
Bank/ NBFC | 1 Year (p.a.) | 3 Year (p.a.) |
Mahindra Finance (Samruddhi) | 6.60% | 7.40% |
ESAF Small Finance Bank FD | 6.00% | 6.00% |
AU Small Finance Bank FD | 6.35% | 7.40% |
LIC HFL FD | 6.70% | 6.85% |
Punjab and Sind Bank FD | 5.85% | 5.85% |
RBL Bank FD | 7.00% | 7.20% |
Repco Bank FD | 7.75% | 7.25% |
IDFC First Bank FD | 6.50% | 7.25% |
Note: Interest rates updated on 28 Aug 2026.
Banks and NBFCs offering a higher rate of return Up to 5-Year Tenure
Bank/ NBFC | 4 Year (p.a.) | 5 Year (p.a.) |
Mahindra Finance (Samruddhi) | 7.45% | 7.45% |
ESAF Small Finance Bank FD | 6.00% | 5.75% |
AU Small Finance Bank FD | 6.75% | 6.75% |
LIC HFL FD | Not offered | 6.90% |
Punjab and Sind Bank FD | 5.85% | 5.95% |
RBL Bank FD | 7.00% | 6.70% |
Repco Bank FD | 6.25% | 6.25% |
IDFC FIRST Bank FD | 6.75% | 6.75% |
Note: Interest rates updated on 28 Aug 2026.
Highlights
- Most banks and NBFCs provide interest in the range of 5.75% p.a. to 7.75% p.a.
- The highest rate is offered by Repco Bank at 7.75% p.a. for a one-year tenure.
- The next highest rate is offered by Mahindra Finance (Samruddhi) and AU Small Finance Bank, both at 7.40% p.a. for a three-year tenure.
- IDFC FIRST Bank offers the next highest rate at 7.25% p.a. for a three-year tenure.
- Repco Bank offers 6.25% p.a. for four-year and five-year tenures.
Summary
This comparison shows that small finance banks and NBFCs generally pay the highest FD interest rates in India, with Repco Bank, Mahindra Finance (Samruddhi) and AU Small Finance Bank among the top payers across the one to five-year tenures compared here. Senior citizens can expect a further 0.50% p.a. or so over these rates, and tax-saving and NRI FD options are also available at select lenders. Always verify the current rate directly with the bank or NBFC before booking, since fixed deposit interest rates change periodically.
FAQs on Which Bank offers the Highest Interest Rate for FD
1.What makes a bank or NBFC offer the highest interest rate for FD?
A bank or NBFC tends to offer the highest interest rate for FD when it wants to attract more deposits, and smaller finance banks and NBFCs often pay more than larger scheduled banks for this reason. The rate offered also depends on the deposit tenure and the type of institution taking the deposit. Comparing current FD rates across banks and NBFCs is the most reliable way to find the highest interest rate for FD at any given time.
2.Do senior citizens get a higher interest rate for FD?
Yes, senior citizens usually receive a higher interest rate for FD than the general public, since most banks and NBFCs offer an additional rate to depositors above 60 years of age. This benefit applies across most tenures offered by a bank or NBFC. Senior citizens should confirm the exact additional rate with the specific bank or NBFC before booking an FD.
3. Can I open a tax-saving FD to claim a tax deduction?
Yes, a tax-saving FD lets you claim a deduction under Section 80C of the Income Tax Act, and it comes with a mandatory five-year lock-in period. This type of FD cannot be withdrawn prematurely like a regular fixed deposit. It is offered by most banks that publish FD interest rates for resident individuals.
4.Can NRIs invest in FD schemes with a high interest rate?
Yes, Non-Resident Indians can invest through NRE and NRO fixed deposit accounts, several of which offer a competitive interest rate for FD. Interest earned on an NRE FD is non-taxable in India and is fully repatriable along with the principal. NRIs should check the specific terms of each bank's FD scheme before investing.
5.Do NBFCs and small finance banks offer a higher interest rate for FD than large banks?
Yes, NBFCs and small finance banks generally offer a higher interest rate for FD compared with larger scheduled banks, since they rely more heavily on deposits to raise funds. However, bank deposits are covered by deposit insurance up to the prescribed limit, while NBFC deposits are not covered in the same way. It helps to weigh this safety difference alongside the FD interest rate before choosing where to invest.
6.What should I check before choosing a bank or NBFC for the highest interest rate for FD?
Before choosing a bank or NBFC for the highest interest rate for FD, check the tenure offered, the minimum deposit amount, and whether the institution is a bank or an NBFC. It also helps to review the premature withdrawal terms and, for NBFCs, the credit rating of the fixed deposit scheme. Comparing these factors alongside the FD interest rate ensures a safer, better-informed choice.
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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