5 Banks that give the best Fixed Deposit rates

Small finance banks are proving to be the best bet for maximising income from deposits. Have a look!

5 Banks that give the best Fixed Deposit rates

One of the most popular forms of investment, at least in India, is a Fixed Deposit (FD). Also known as term deposit, people prefer FDs for the safety and the decent rate of return that it assures. As the name suggests, by investing in a Fixed Deposit you are putting a lump sum money in a bank for a fixed tenure. At the end of the tenure, you are assured of the deposit and the compounded interest on it. The Fixed Deposit interest rates are higher than a savings bank account and even recurring deposit. Apart from the high Fixed Deposit rates, by investing in FD you can also enjoy Income Tax deductions up to Rs. 1.5 lakh under Section 80C.

The FD interest rates depend on the tenure of deposit and the tenure may range from a few days to even up to 10 years. Banks generally offer a higher rate of interest for the senior citizen. The rate of interest offered on FD varies from bank to bank and some banks offer a higher rate of interest than others. The Fixed Deposit interest rates keep on fluctuating from time to time and small banks often pip the top banks in terms of competitive rates. Here we give you a list of some of the best FD offers across all Indian banks as on 28 March, 2019

Related: FAQs about fixed deposits 


1. ESAF Small Finance Bank:
The Evangelical Social Action Forum’s Small Finance Bank based out of Thrissur is offering one of the most competitive FD interest rates in the present day market. They are offering 8.75% per annum to regular resident citizens (rate is higher for senior citizens) for an investment of less than Rs. 1 crore. The tenure, for which this lucrative interest is available, is between 1 and 2 years.


2. Suryoday Small Finance Bank:
An RBI-licensed small finance bank to come out of Maharashtra, Suryoday Small Finance Bank offers 8.75% interest rate for an FD held for a 2-3 year period. Its 1-2 year FD too carries an attractive 8.5% rate of interest. Their special tenure 950 days FD yields an even higher 9% per annum rate of return.

Related: FAQs About Recurring Deposits: Everything you need to know 

3. Utkarsh Small Finance Bank:
Originally a Varanasi-based micro-finance institution, Utkarsh Small Finance Bank offers some of the best interest rates against Fixed Deposits. For an investment lasting 1-2 year in this bank, you will be able to earn up to 8.5% return. 

4. Jana Small Finance Bank
Investments ranging from 181 days to 3 years can fetch you a very rewarding 8.5% rate of return. A fixed 3-year tenure can bring in an even higher rate of 9%. The rates are applicable for deposits below Rs. 1 crore. Jana Small Finance Bank was originally India’s first urban microfinance venture and they eventually got the small finance status from RBI in 2017. 

Related: Choosing between fixed-income and market-linked investment avenues

5. AU Small Finance Bank
AU Small Finance Bank started out as AU Financers, a non-banking finance company based out of Jaipur. They offer up to 8.5% per annum on Fixed Deposits starting with amounts as low as Rs. 1000 only. Its 3 years Fixed Deposit carries an 8.5% interest rate while a 2-year investment can earn you 8.25% per annum.


Noticeably, going by the rate of returns offered against Fixed Deposits, the small finance banks feature heavily towards the top of the pile. Among the regular banking category, banks like IDFC, RBL, DCB and IndusInd have been offering returns at or above the 8% per annum mark. Top private banks like HDFC Bank and Axis offer a maximum of 7.40% interest on investments below the crore mark while public sector giants like SBI and Punjab National Bank has kept the rate of return mostly below the 7% per annum mark.

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