- Fixed deposit rates vary significantly, with small finance banks offering over 8 percent returns.
- Senior citizens can earn up to 8.5 percent interest on fixed deposits at select small finance banks.
- Large banks offer FD rates between 6 to 7.45 percent, with public sector banks on the lower end.
Fixed Deposit Returns: If you're planning to park your money in a fixed deposit (FD), it may be worth spending a few extra minutes comparing interest rates before you invest.
The gap between the highest and lowest FD rates is now significant. While most large public and private sector banks are offering returns between 6 per cent and 7.25 per cent, several small finance banks are paying over 8 per cent on select tenures.
The latest comparison of FD rates (as of July 20, 2026 shows) that Suryoday Small Finance Bank is offering up to 8.1 per cent for regular customers on a 30-month deposit. Utkarsh Small Finance Bank also offers up to 8.1 per cent on a 666-day FD, while Unity Small Finance Bank, Jana Small Finance Bank and Shivalik Small Finance Bank are offering up to 8 per cent on select tenures.
For senior citizens, the returns are even higher. Unity Small Finance Bank and Shivalik Small Finance Bank offer up to 8.5 per cent, while Jana Small Finance Bank and Ujjivan Small Finance Bank offer up to 8.3 per cent.
Among the larger lenders, Bandhan Bank offers up to 7.45 per cent, IDFC First Bank up to 7.35 per cent, Yes Bank up to 7.25 per cent, and RBL Bank up to 7.2 per cent for regular depositors. Public sector banks continue to offer comparatively lower rates, with State Bank of India (SBI) offering up to 6.45 per cent, Punjab National Bank (PNB) up to 6.6 per cent, and Bank of Baroda up to 6.75 per cent.
Compare Before You Invest
According to Saurabh Jain, Co-founder and CEO of Stable Money, the FD market continues to see regular rate revisions as banks respond to changing market conditions.
"Most recently, Unity Small Finance Bank revised its fixed deposit rates, with senior citizens now earning up to 8.5 per cent on its special 501-day fixed deposit. Such revisions reinforce the continued competitiveness of the fixed deposit market, particularly among small finance banks, which continue to offer attractive opportunities for investors seeking higher yields," he said.
Jain said investors should avoid choosing a bank simply because they already have a savings account there.
"The availability of competitive rates across institutions highlights the importance of comparing fixed deposit offerings rather than limiting investments to an existing banking relationship," he said.
Don't Chase Returns Alone
A higher interest rate can improve returns, but it should not be the only deciding factor.
Jain advises investors to also consider the financial strength of the bank, the deposit tenure, liquidity needs and the deposit insurance available before investing.
He added that fixed deposits continue to play an important role in providing stability and predictable income, especially during uncertain market conditions.
Why Diversification Matters
Instead of putting all your savings into one FD, experts recommend spreading deposits across multiple banks and different tenures.
Jain also reminded investors to keep the Deposit Insurance and Credit Guarantee Corporation (DICGC) cover in mind. Bank deposits are insured up to Rs 5 lakh per depositor per bank, including both principal and interest. Diversifying deposits across institutions can therefore improve both safety and returns.
(Data Cited From Stable Money Analysis)
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