List of Top Bank FDs in India & Bank FD Interest Rates for 2024

Fixed deposits or FDs can be a safe way for investors to earn returns on a fixed interest rate for a number of years. FDs can sometimes offer special benefits and interest rates for senior citizens and offer multiple interest payout options. There are a variety of factors to consider before choosing an FD and interest rates is among the most important of them. Therefore, this article lists some of the top bank FDs in India, including their interest rates based on tenure.

Top Bank FDs in India for 2024

Here is a list of the highest fixed deposit rates in India:

Name of the Bank	FD Interest Rates for Regular Candidates (% p.a. )
Unity Small Finance Bank	4.50% – 9.00%
Suryoday Small Finance Bank	4.00% – 8.65%
Utkarsh Small Finance Bank	4.00% – 8.50%
SBM Bank	4.25% – 8.25%
ESAF Small Finance Bank	4.00% – 8.25%
Ujjivan Small Finance Bank	3.75% – 8.25%
DCB Bank	3.75% – 8.05%
AU Small Finance Bank	3.75% – 8.00%
Bank of Baroda	4.25% – 7.25%
Canara Bank	4.00% – 7.25%

Note: This list is meant to be educational and is not recommendatory. The data on this list has been taken on 31st July, 2024. Investors should conduct their own research into the top bank FDs before investing.

Overview of the Top Bank FDs in India 

Unity Small Finance Bank

Unity Bank is a scheduled commercial bank. The bank is promoted by Centrum Financial Services Ltd. The Unity Small Finance Bank’s FD interest for general citizens ranges from 4.5% to 9%. Here is the breakdown of the latest FD interest rates at Unity Small Finance Bank, according to their tenure:

Tenure	FD Interest Rates (% p.a.)
1 year	7.85%
2 years	7.90%
3 years	8.15%
4 years	8.15%
5 years	8.15%
1001 days (Special Scheme)	9.00%

Suryoday Small Finance Bank

Suryoday Small Finance Bank provides various banking services in India. The bank’s fixed deposit interest rates range from 4.00% to 8.65%. Here is a breakdown of the bank’s FD interest rates according to their tenure:

Tenure	FD Interest Rates (% p.a.)
1 year	6.85%
2 years	8.50%
3 years	8.60%
4 years	6.75%
5 years	8.25%
Tax-Saving FD	8.25%
2 years and 2 days (Special Scheme)	8.65%

Utkarsh Small Finance Bank

Utkarsh Small Finance Bank is a small finance bank (SFB) in India offering financial services. The interest rates on FDs for this bank ranges from 4.00% to 8.50%. Here is a breakdown of the FD interest rates for Utkarsh Small Finance Bank, according to their tenure:

Tenure	FD Interest Rates (% p.a.)
1 year	8.00%
2 years	8.50%
3 years	8.50%
4 years	7.75%
5 years	7.75%
Tax-Saving FD	7.50%
2 years to 3 years;1500 days	8.50%

SBM Bank

SBM Bank India is a subsidiary of the State Bank of Mauritius. The bank was the first bank in India to receive a universal banking licence from the Reserve Bank of India. This milestone allowed the bank to establish a fully owned subsidiary in the country. SBM Bank’s FD interest rates range from 4.25% to 8.25%. Here is a breakdown of the FD interest rates according to their tenure:

Tenure	FD Interest Rates (% p.a.)
1 year	7.05%
2 years	7.30%
3 years	7.30%
4 years	7.40%
5 years	7.75%
Tax-Saving FD	7.75%
3 years and 2 days	8.25%

ESAF Small Finance Bank

ESAF Small Finance Bank, based in Thrissur, Kerala, is an Indian bank focused on offering banking services and small loans. Originally known as ESAF Microfinance and Investments, the bank primarily serves those who have limited access to traditional financial services. The FD interest rates at ESAF Small Finance Bank ranges from 4.00% to 8.25%. Here is a breakdown of the bank’s FD interest rates based on their tenure:

Tenure	FD Interest Rates (% p.a.)
1 year	6.00%
2 years	8.25%
3 years	6.75%
4 years	6.75%
5 years	6.75%
2 years to less than 3 years	8.25%

Ujjivan Small Finance Bank

Ujjivan Small Finance Bank Limited is based in Bangalore, India. The bank began its operations on 1st February, 2017 as a small finance bank. The bank’s FD rates range from 3.75% to 8.25%. Here is a breakdown of Ujjivan Small Finance Bank’s fixed deposit interest rates based on their tenure:

Tenure	FD Interest Rates (% p.a.)
1 year	8.25%
2 years	7.75%
3 years	8.50%
4 years	7.75%
5 years	7.75%
Tax-Saving FD	7.50%
2 years to 3 years;1500 days	8.50%

DCB Bank

DCB Bank Limited is a private sector bank in India, operating as a scheduled commercial bank. It belongs to the new generation of banks that received their licence from the Reserve Bank of India on 31 May 1995. DCB Bank’s FD interest rates range from 3.75% to 8.05%. Here is a breakdown of the bank’s fixed deposit interest rates according to their tenure:

Tenure	FD Interest Rates (% p.a.)
1 year	7.10%
2 years	7.50%
3 years	7.55%
4 years	7.40%
5 years	7.40%
Tax-Saving FD	7.40%
19 months to 20 months	8.05%

AU Small Finance Bank

AU Small Finance Bank Limited is India’s largest tech-driven small finance bank. It was established in 1996 as AU Financiers Ltd. It is a vehicle finance company and Non-Banking Financial Company (NBFC), it transitioned into a full-fledged small finance bank on 19th April 2017. The FD interest rates at AU Small Finance Bank ranges from 3.75% to 8.00%. Here is a breakdown of the FD interest rates at the bank, based on their tenure:

Tenure	FD Interest Rates (% p.a.)
1 year	7.25%
2 years	7.75%
3 years	7.50%
4 years	7.25%
5 years	7.25%
Tax-Saving FD	7.25%
18 months	8.00%

Bank of Baroda

Bank of Baroda is an Indian government bank in the public sector. The bank is headquartered in Vadodara, Gujarat. It is the third largest public sector bank in India after State Bank of India. The FD interest in the Bank of Baroda ranges from 4.25% to 7.25%. Here is a breakdown of the banks’s FD interest rates according to their tenure:

Tenure	FD Interest Rates (% p.a.)
1 year	6.85%
2 years	6.85%
3 years	7.15%
4 years	6.50%
5 years	6.50%
Tax-Saving FD	6.50%
399 days – BOB Monsoon Dhamaka Deposit Scheme	7.25%

Canara Bank

Canara Bank is a public sector bank in India. The bank was founded in 1906 by Ammembal Subba Rao Pai in Mangalore. In 1969, the bank was nationalised and is now headquartered in Bangalore. Canara Bank also operates internationally, with offices in London, Dubai, and New York. The FD interest rates for Canara Bank India ranges from 4.25% to 7.25%. Here is a breakdown of the interest rates according to their tenure:

Tenure	FD Interest Rates (% p.a.)
1 year	6.85%
2 years	6.85%
3 years	6.80%
4 years	6.80%
5 years	6.70%
Tax-Saving FD	6.70%
444 days	7.25%

Introducing High Interest Fixed Depsoits on smallcase

High-interest fixed deposits from RBI-regulated banks are now available on the smallcase app. These FDs provide stable returns and help diversify your investments, reducing reliance on volatile markets. The banks on smallcase offer some of the highest interest rates available as they compound the interest quarterly. All fixed deposits on smallcase are regulated by the RBI and insured by DICGC. They cover amounts up to Rs. 5 lakh per bank. Every step of the FD process, from booking to withdrawal, is managed digitally, making it hassle-free and eliminating the need for physical paperwork! Let us now learn how to book an FD on smallcase.

How to Book a Fixed Deposit on smallcase?

Here is how interested candidates can book an FD on smallcase:

• Select a Bank: Interested candidates can compare the best FD rates in India from various partner banks and select one.
• Choose a Scheme: Then, they can pick an FD scheme based on the tenure—short-term, medium-term, or long-term. 
• Verify Your Identity: One would then need to digitally verify their PAN and Aadhaar.
• Complete Additional KYC: Provide any necessary additional KYC details, such as address, personal/professional information, and nominee selections.
• Make Payment: You can then pay for your FD using net banking or UPI.
• Video KYC (if required): Some banks may require an additional video KYC based on the deposit amount.

You can learn more about smallcase fixed deposits here.

Features of Bank Fixed Deposits in India

Bank Fixed Deposits offer a secure way to earn interest over a specific period, with terms ranging from 7 days to 10 years. Here’s what you need to know:

• Security: Bank FDs are more secure compared to other investment options.
• Interest Earnings: You earn a fixed interest rate that remains unaffected by market changes, typically higher than savings account rates.
• Investment Flexibility: While there is no maximum deposit limit, the minimum investment usually ranges between Rs 1,000 and Rs 5,000, depending on the bank or NBFC.
• Tenure Options: You can select a tenure that suits your needs, with options available in days, months, or years.
• Interest Payout: Interest can be received regularly (monthly, quarterly, half-yearly, yearly) or at maturity.
• Higher Rates for Seniors: Senior citizens are often offered the highest fixed deposit interest rates.
• Single Deposit Accounts: Each FD account allows for one deposit. To invest more, you need to open a new FD.
• Lock-in Period: FDs have a lock-in period, also known as the tenure, and withdrawing funds prematurely may incur penalties.
• Loan Facility: In emergencies, you can avail a loan against your FD at some banks. The loan is usually at a lower interest rate since the FD serves as collateral.

How is the Interest Amount Calculated for FDs?

Since smallcase’s cumulative fixed deposits compound quarterly, interest is calculated every three months and added to the principal. This new total then earns interest in the next period. Here is the formula that is used to calculate this interest amount on the top bank FDs in India:

A=P(1+r/n)^nt

Here, 

• A: Maturity amount
• P: Principal amount
• r: Annual interest rate
• n: The number of times interest is compounded per year (for quarterly, n=4) 
• t: Tenure in years

How to Choose the Top Bank FDs in India?

​​Fixed deposits can offer higher returns when interest is compounded periodically rather than paid out at maturity. The compounding frequency—quarterly, semi-annually, or annually—determines the overall return. Generally, FDs with quarterly compounding yield higher returns than those with semi-annual or annual compounding. As of now, smallcase only offers FDs with quarterly compounding. 

When comparing the top bank FDs in India with identical tenure, investment amount, and interest rate, the scheme with more frequent compounding will offer a higher annualised yield. Let us look at an example of how this is possible:

Case 1: Quarterly Compounding

Raviinvests Rs. 30,000 in a cumulative FD with quarterly compounding at an annual interest rate of 6%. The interest compounds every three months as demonstrated in the calculation below.

Year 1:

• Quarter 1:
  • Principal: Rs. 30,000
  • Interest: Rs. 30,000 * (6% / 4) = Rs. 450
  • New Principal: Rs. 30,000 + Rs. 450 = Rs. 30,450
• Quarter 2:
  • Principal: Rs. 30,450
  • Interest: Rs. 30,450 * (6% / 4) = Rs. 456.75
  • New Principal: Rs. 30,450 + Rs. 456.75 = Rs. 30,906.75
• Quarter 3:
  • Principal: Rs. 30,906.75
  • Interest: Rs. 30,906.75 * (6% / 4) = Rs. 463.60
  • New Principal: Rs. 30,906.75 + Rs. 463.60 = Rs. 31,370.35
• Quarter 4:
  • Principal: Rs. 31,370.35
  • Interest: Rs. 31,370.35 * (6% / 4) = Rs. 470.56
  • New Principal: Rs. 31,370.35 + Rs. 470.56 = Rs. 31,840.91

Year 2:

• Follow the same calculation method for each quarter using the new principal.
• By the end of Year 2, the principal will be approximately Rs. 33,775.27.

Year 3:

• Continue the quarterly compounding process.
• By the end of Year 3, the FD will mature to Rs. 35,947.

Case 2: Annual Compounding

Ravi invests Rs. 30,000 in a cumulative FD with annual compounding at the same interest rate of 6%. The interest compounds once a year as demonstrated in the calculation below.

Year 1:

• Principal: Rs. 30,000
• Interest: Rs. 30,000 * 6% = Rs. 1,800
• New Principal: Rs. 30,000 + Rs. 1,800 = Rs. 31,800

Year 2:

• Principal: Rs. 31,800
• Interest: Rs. 31,800 * 6% = Rs. 1,908
• New Principal: Rs. 31,800 + Rs. 1,908 = Rs. 33,708

Year 3:

• Principal: Rs. 33,708
• Interest: Rs. 33,708 * 6% = Rs. 2,022
• New Principal: Rs. 33,708 + Rs. 2,022 = Rs. 35,730

Therefore, FDs that compound quarterly can yield more interest than those that compound semi-annually or annually, as seen in the case study above. Potential investors may use this metric to choose the highest FD rates for their fixed deposit investments.

Benefits of Investing in the Top Bank FDs in India

Here are a few benefits of investing in bank fixed deposits:

• Guaranteed Returns: Fixed deposits provide stable and predictable returns, unaffected by market fluctuations or economic changes.
• Assured Maturity: At the end of the term, you receive your original investment along with the accrued interest, ensuring capital preservation.
• Compound Interest for Growth: Interest is often compounded, meaning you earn interest on the accumulated interest, allowing your savings to grow faster. For example, during quarterly compounding, the interest would be compounded every three months, resulting in higher interest rates than FDs compounded annually or semi-annually.
• Higher Returns for Senior Citizens: Banks often offer higher interest rates on fixed deposits for senior citizens, helping them maximise their savings for retirement.
• Flexible Tenure Options: You can choose a tenure that fits your financial goals, ranging from a few months to several years.
• Ease of Investment: Opening a fixed deposit is straightforward, requiring minimal documentation and a simple application process. At smallcase, this is a completely hassle-free and digital process that does not require you to visit a bank!
• Regular Income Stream: Fixed deposits can provide a regular income, with interest paid out periodically. This may be ideal for retirees.
• Loan Facilities: You can use your fixed deposit as collateral for loans at some banks. This can provide liquidity without breaking the deposit.
• Tax Benefits: Certain fixed deposits offer tax deductions, encouraging long-term savings while reducing your tax liability.
• No Market Dependency: Fixed deposits offer a secure investment option, independent of market conditions and economic fluctuations.

Taxation on the Top Bank FDs in India

In India, interest earned on fixed deposits (FDs) is taxable under the Income Tax Act of 1961. It is classified as “income from other sources” and added to your total income for the year. The tax rate depends on your total income.

TDS Exemption Limits

Banks deduct Tax Deducted at Source (TDS) on interest annually, not just when the FD matures. Here are some of the TDS exemption limits:

• General: You are exempted from TDS if your FD interes is Rs. 40,000 per year.
• Senior citizens (above 60 years): For senior citizens, the exemption limit is Rs. 50,000 interest per year.

If your interest income exceeds these limits, the bank will deduct TDS. If it is below these limits, no TDS will be deducted. However, TDS is not your total tax liability; your actual tax depends on your total income and tax bracket. You may need to pay additional tax if you fall into a higher bracket, or you might get a refund if you are in a lower bracket. If your total income for the year is less than Rs. 2,50,000, you do not need to pay tax, and no TDS will be deducted. 

TDS Rates Based on Income

For interest earnings over Rs. 40,000 in a financial year, the TDS fixed deposit rates are:

• 10% for PAN holders.
• 20% for non-PAN holders.

For example, if you earn Rs. 50,000 in interest from your FD in a year:

• With PAN: The bank deducts Rs. 1,000 (10% of Rs. 10,000, the excess over Rs. 40,000).
• Without PAN: The bank deducts Rs. 2,000 (20% of Rs. 10,000).

Forms Related to TDS

• To avoid TDS deduction, you can submit Form 15G (for individuals below 60 years) or Form 15H (for senior citizens) at the start of the financial year.
• Form 26AS is a consolidated tax statement on the Income Tax Department’s website. It will reflect the TDS deducted by the bank. 

At maturity, you receive the total principal amount plus net interest after the TDS deduction. When filing your tax return, you can report the interest income earned each year and claim credit for the TDS deducted.

Taxation of smallcase FDs

All FDs available on smallcase are cumulative. This means that interest is paid at maturity. Despite this, TDS is deducted each year on the interest earned. You can include the interest earned each year in your annual income tax return, even if you haven’t received the payment yet. You can learn more about the tax implications of smallcase FDs here.

Factors Affecting Fixed Depsosit Investments in India

Here are a few factors that may affect your fixed deposit investments:

• RBI Policy: The Reserve Bank of India (RBI) sets the repo rate, which impacts the cost of funds for banks and, consequently, FD rates.
• Inflation: High inflation generally leads to higher FD rates as investors seek better returns to offset the reduced purchasing power of money. Conversely, low inflation usually results in lower FD rates.
• Economic Conditions: A growing economy increases demand for credit and investment, leading to higher FD rates. In contrast, a slowing economy typically results in lower rates.
• Deposit Amount: Banks offer higher interest rates for larger deposits to support their liquidity and profitability, while smaller deposits usually attract lower rates due to higher operational costs.
• Deposit Tenure: Longer tenures generally offer higher interest rates as banks benefit from locking in funds for a more extended period. Shorter tenures, however, often have lower rates due to increased liquidity risk and opportunity costs.

To Wrap It Up…

The top bank FDs in India can provide safety and assured returns based on a fixed interest rate which is usually higher than a savings account interest rate. Small Finanace Banks offer some of the highest FD interest rates, with Unity Small Finance Bank offering FD interest rates rangin in between 4.5% to 9%. You can now invest in FDs through smallcase. Banks available on smallcase compound their FDs quarterly, resulting in higher interest rates. Learn more about how to choose the best fixed deposits here!

Frequently Asked Questions About Top Bank FDs in India