Which Banks Offer the Highest FD Rates in India? (Top Rate: 8.60% — September 2026 Update)
Author: Prathamesh C., Financial Analyst | Reading time: ~8 min | Last updated: September 26, 2026 | Next scheduled review: October 26, 2026
Disclaimer: This article is for educational purposes only and should not be construed as formal financial advice. FD rates change frequently — verify the current rate with the bank or India Post before investing. Please consult a SEBI-registered investment advisor for advice specific to your situation.
Key Takeaways
- Unity Small Finance Bank currently offers the highest FD rate in India at 8.60% on a 1001-day tenure for general depositors.
- Big banks like SBI, HDFC, and ICICI cap out much lower, around 6.45%–6.50% for regular customers.
- No RBI-regulated bank currently offers 9%, 9.5%, or 10% — treat any scheme claiming those numbers with caution.
Small finance banks (SFBs) are paying meaningfully more interest on fixed deposits than India’s largest banks this month. Unity Small Finance Bank tops the table at 8.60%, while SBI’s regular FD rate tops out at just 6.45%. That five-bank, five-SFB gap is the single most important number in this update.
Highest FD Rates in India This Month: The Full Comparison
Small finance banks currently pay 1.5 to 2 percentage points more than large PSU and private banks on comparable fixed deposits. That gap is the reason “highest FD rate” searches almost never land on SBI or HDFC.
Here is how the top 10 institutions stack up right now.
Small Finance Banks Offering the Highest FD Rates
| Rank | Bank | Best General Rate | Best Tenure | Senior Citizen Rate |
|---|---|---|---|---|
| 1 | Unity Small Finance Bank | 8.60% | 1001 days | +0.50% typical add-on* |
| 2 | Suryoday Small Finance Bank | 8.40% | ~30–36 months | +0.50% typical add-on* |
| 3 | Shivalik Small Finance Bank | 8.30% | Long tenure | +0.50% typical add-on* |
| 4 | Utkarsh Small Finance Bank | 8.25% | Long tenure | 8.75% (confirmed) |
| 5 | Jana Small Finance Bank | 8.00% | Long tenure | +0.50% typical add-on* |
*The 0.50% senior citizen bonus is the industry-standard convention across most Indian banks. Confirm the exact senior citizen rate directly with each SFB before booking, since it was not individually published for every institution in our source data.
Big Bank FD Rates: SBI, HDFC, ICICI, BoB & PNB Compared
Traditional banks trade yield for scale and brand trust. Here is where the five largest names stand this month.
| Bank | Type | General Rate Range | Senior Citizen Rate |
|---|---|---|---|
| State Bank of India (SBI) | PSU | 3.05%–6.45% | Up to 6.90% |
| HDFC Bank | Private | ~6.50% | ~7.00%–7.10% |
| ICICI Bank | Private | ~6.50% | ~7.00%–7.10% |
| Bank of Baroda | PSU | ~6.45%–6.60% | ~6.95%–7.10% |
| Punjab National Bank (PNB) | PSU | ~6.45%–6.60% | ~6.95%–7.10% |
SBI also runs a special 444-day “Amrit Vrishti” term deposit at roughly 6.5%–6.9%, but even that promotional rate stays well below the SFB leaders.
Post Office FD vs Bank FD vs SCSS: Where Is Your Money Safest?
Rate is only half the decision. Safety and liquidity change the real math.
Bank fixed deposits are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5 lakh per depositor, per bank. Anything above that ceiling carries the individual bank’s own credit risk, not a government guarantee.
Post Office Time Deposits and the Senior Citizen Savings Scheme (SCSS) work differently. Both carry a sovereign guarantee from the Government of India, with no ₹5 lakh cap. That makes them effectively risk-free, even though their rates trail the top small finance banks.
Currently, Post Office Time Deposits pay 6.90% on a 1-year tenure, rising to 7.50% on the 5-year tax-saving deposit. SCSS pays a flat 8.2% per annum, paid quarterly, for depositors aged 60 and above.
Senior Citizen FD Rates & the Senior Citizen Savings Scheme (SCSS)
Depositors aged 60 and above earn more on almost every fixed-income product in India. Most banks add a flat +0.50% on top of their regular FD rate for senior citizens.
Utkarsh Small Finance Bank illustrates this clearly: its 8.25% general rate becomes 8.75% for senior citizens, the single highest confirmed senior rate in this month’s comparison.
SCSS remains the strongest pure-safety option for retirees. It pays 8.2% annually with a sovereign guarantee and no deposit cap, and interest up to ₹50,000 qualifies for a special deduction under Section 80TTB.
Analyst’s Take: How to Read This Month’s FD Rate Table
Chasing the top rate alone is a common mistake. Small finance banks earn their higher yields by taking on more balance-sheet risk than SBI or HDFC, and depositors should size their FD accordingly.
A practical approach many financial planners recommend is laddering deposits across two or three institutions, keeping each bank’s exposure within the ₹5 lakh DICGC insurance limit. This captures the higher SFB yield without concentrating risk in a single, less-established bank.
From my own review of this month’s data, the widening gap between SFB and PSU bank rates (now over 2 percentage points at the top end) reflects smaller banks competing hard for deposit growth. That gap has held for several months and is worth watching each quarter rather than treating as a one-off spike.
FD Taxation & Premature Withdrawal Rules You Should Know
FD interest is fully taxable in India, regardless of which bank or scheme you use.
Tax: Interest is taxed as “income from other sources” at your applicable income tax slab rate. Banks deduct TDS once annual interest crosses ₹40,000 (₹50,000 for senior citizens). Post Office deposits have no TDS, but the interest must still be declared and taxed.
Premature withdrawal: Most banks allow you to break an FD after a short lock-in, often just 6–7 days, though you’ll pay a modest interest penalty. Post Office Time Deposits only permit withdrawal after 6 months.
Frequently Asked Questions
Which bank gives 9.5% interest on FD?
No RBI-licensed bank or small finance bank currently offers 9.5% on a fixed deposit. This month’s highest confirmed rate is 8.60% at Unity Small Finance Bank. Any offer advertising 9.5% guaranteed FD returns deserves extra scrutiny — verify the institution’s RBI license before depositing.
Which bank gives 8.75% interest on FD?
Utkarsh Small Finance Bank offers 8.75% to senior citizens (60+), calculated as its 8.25% general rate plus the standard 0.50% senior citizen bonus.
Which bank is giving the highest interest on FD right now?
Unity Small Finance Bank leads this month’s comparison at 8.60% on a 1001-day tenure for general (non-senior) depositors.
Where can I get 9% interest on FD?
No bank fixed deposit in India currently reaches 9%. The closest safe alternatives are Unity SFB at 8.60% (general) or the government-backed SCSS at 8.2% for senior citizens, which trades a slightly lower rate for a sovereign guarantee.
Where can I get 10% interest on FD?
No regulated Indian bank FD offers 10% today. Products advertising returns this high are typically unregulated deposit schemes, corporate NCDs, or bonds — they are not DICGC-insured and carry materially higher risk than a bank fixed deposit.
check this also: Why Is HDFC ERGO Insurance So Expensive? The 84–89% Claim Ratio Behind the Price (2026)
2 Comments