Compare FD Rates – All Banks India 2026

Fixed Deposit Rate Comparison India 2026 — Everything You Need to Know

If you are a salaried Indian looking for a safe, predictable place to park your savings, fixed deposits remain the most trusted investment product in the country. Even in 2026, with equity markets delivering spectacular runs and mutual funds gaining mainstream acceptance, the humble FD continues to anchor millions of Indian households. This page gives you the most comprehensive, up-to-date comparison of FD rates across every bank type in India — public sector banks, private banks, small finance banks, NBFCs, foreign banks, and the post office — so you can make the smartest decision for your money without spending hours browsing individual bank websites.

In February 2026, the Reserve Bank of India cut the repo rate by 25 basis points, bringing it down to 6.25%. This was a significant signal — it marked the beginning of a rate easing cycle after a long period of elevated borrowing costs. For FD investors, this means that the exceptionally high rates we saw in 2023-24 are gradually coming down. If you have been waiting to lock in a good FD rate, now is a particularly important time to compare and act, because rates are likely to drift lower over the next 12-18 months.

How to Read This FD Comparison Table

The table at the top of this page sorts banks by their best available FD rate — the single highest rate any tenure offers at that bank. Here is what each column means so you can make a truly informed comparison:

One thing most people miss: the "best rate" shown is often available only at a specific tenure — say, 444 days or 600 days. Banks are creative with "special tenures" that offer higher rates than standard slabs. Always click through to the individual bank's FD calculator to verify the exact tenure for the best rate.

How Fixed Deposit Interest Rates Work in India

Understanding how FD rates are determined helps you anticipate changes and make better timing decisions. Unlike home loans (which are now externally benchmarked to the repo rate), FD rates are entirely at the bank's discretion. Banks set FD rates based on several internal and external factors:

The RBI Repo Rate: When RBI cuts the repo rate, banks' cost of borrowing from RBI goes down. Over time, this reduces the pressure to offer high FD rates to attract deposits, so FD rates follow repo rate cuts downward — typically with a lag of 1-3 quarters.

Bank's Own Liquidity Needs: A bank that urgently needs deposits to meet its credit-deposit ratio or fund a surge in loan disbursements may offer higher FD rates temporarily. This is why you often see small or mid-size banks offering 0.5-1% more than large banks.

Competition and Market Position: Small Finance Banks (SFBs) need to attract retail deposits to fund their microfinance and MSME lending. Since they cannot rely on wholesale funding as easily as large banks, they consistently offer 1-2% higher FD rates than public sector banks.

Tenure-specific Rate Laddering: Banks manage their Asset-Liability positions by offering different rates at different tenures. A bank may offer a higher rate at 2-3 years to attract long-term deposits, or a higher 1-year rate if it needs short-term liquidity.

Bank-by-Bank Analysis: FD Rates in India April 2026

Small Finance Banks — Highest Rates, Slightly Higher Risk

If you are looking purely at return, Small Finance Banks lead the pack in 2026. Unity Small Finance Bank currently offers 9% on select tenures, making it the highest FD rate from a regulated bank in the country. Suryoday Small Finance Bank follows closely at 9%, with ESAF Small Finance Bank offering 8.75%. AU Small Finance Bank, the largest and oldest SFB, offers 8-8.5% and is now transitioning into a universal bank.

The important question: Are SFBs safe? Yes, with important caveats. All SFBs are regulated by RBI, have a banking licence, and deposits up to ₹5 lakh per depositor are covered by DICGC insurance. The risk is not regulatory — it is operational. Smaller SFBs may have concentrated exposure to microfinance or agriculture, which can lead to stress during economic downturns. For amounts within the ₹5 lakh insurance limit, SFBs are a compelling choice.

Large Private Banks — Safety and Digital Convenience

HDFC Bank leads private sector FD rates in 2026 at 7.4%, followed by ICICI Bank at 7.25% and Axis Bank at 7.25%. These banks score low on rate but high on trust, digital experience, and customer service. If you hold more than ₹5 lakh and want to avoid thinking about insurance limits and bank-specific risks, HDFC or ICICI is the pragmatic choice.

Kotak Mahindra Bank and IndusInd Bank occasionally offer special FD schemes at 7.5-7.75%, worth checking directly on their apps. Yes Bank, after its crisis and reconstruction, has been aggressively offering 8%+ rates to rebuild its deposit base — another option for smaller amounts.

Public Sector Banks — The Trusted Backbone

State Bank of India currently offers 7.1% on its peak rate tenure, which is the benchmark many Indians compare everything else against. Bank of Baroda, Punjab National Bank, and Canara Bank are in the same range. Public sector banks have the implicit backing of the government of India, which provides psychological comfort even beyond the ₹5 lakh DICGC limit — though this should not be over-relied upon as formal protection.

For retirees with large corpora and conservative risk appetite, SBI and other PSU banks remain the default choice despite not offering the highest rates. The SBI Tax Saving FD at the current rate with Section 80C deduction on up to ₹1.5 lakh per year continues to attract millions of investors every March.

NBFCs — High Rates but No DICGC Protection

Bajaj Finance Fixed Deposits consistently offer among the highest rates in the market — often 8.3-8.5% for the general public and up to 8.75% for senior citizens. Shriram Finance is another well-established NBFC offering competitive rates. The critical difference: NBFC deposits are not covered by DICGC insurance. Your protection depends entirely on the NBFC's credit rating and financial health. Bajaj Finance has the highest credit ratings (CRISIL AAA/ICRA AAA), which provides comfort, but it is still a different risk profile from a bank deposit.

Tips for Choosing the Right FD in 2026

1. Match tenure to your actual need: The biggest mistake people make is chasing the highest rate without thinking about when they will need the money. Breaking an FD early attracts a penalty of 0.5-1% on the applicable rate. If you might need the money in 18 months, do not lock it in a 3-year FD just for an extra 0.25%.

2. Use the FD laddering strategy: Instead of putting all your money in one FD, split it into 3-4 FDs with different maturity dates — say, 1 year, 2 years, 3 years. This gives you periodic liquidity and ensures part of your corpus renews at potentially higher future rates if the rate cycle turns upward again.

3. Respect the ₹5 lakh DICGC limit per bank: If you have more than ₹5 lakh to invest in FDs, spread it across 2-3 banks rather than concentrating it in one. The DICGC guarantee covers ₹5 lakh per depositor per bank (including interest), not per FD.

4. Senior citizens should always ask for the extra rate: Most banks offer 0.25-0.5% additional interest to depositors aged 60+. Some banks like SBI offer a further 0.25% "super senior" rate for those aged 80+. Always verify and activate this while opening the FD — it is not always applied automatically online.

5. Quarterly payout vs cumulative: If you need regular income (like for monthly expenses), choose a quarterly payout plan. If you are building a corpus, choose cumulative (reinvest interest) to benefit from compounding. Over 5 years, compounding at 7% on ₹5 lakh gives you approximately ₹7.01 lakh cumulative vs ₹6.75 lakh with quarterly payout — a difference of ₹26,000.

6. Compare effective yield, not just nominal rate: SFBs often have special tenures (333 days, 500 days, 777 days) that offer peak rates. Always calculate the annualised return using an FD calculator and compare that effective yield across banks, not just the headline percentage.

Tax on FD Interest in India — Complete Guide

This is where many FD investors lose more money than they realise. FD interest is fully taxable as ordinary income in India — it is added to your total income and taxed at your applicable slab rate. There is no special tax treatment for FD interest, unlike equity long-term capital gains which enjoy a ₹1.25 lakh exemption and a lower 12.5% tax rate.

TDS on FD Interest: Banks are required to deduct TDS (Tax Deducted at Source) at 10% if the total FD interest credited to you in a financial year exceeds ₹40,000 (₹50,000 for senior citizens). This applies per bank — so if you have FDs at three different banks, each bank calculates TDS independently based on what it pays you.

Important nuance — TDS deducted ≠ Tax paid: TDS of 10% is just a withholding mechanism. If you are in the 30% tax bracket, you still owe the remaining 20% when you file your ITR. Conversely, if your total income is below the taxable limit (₹7 lakh under the new regime with rebate), you can claim the TDS back as a refund.

Form 15G and Form 15H — Avoiding Unnecessary TDS: If your total income is below the taxable limit, you can submit Form 15G (for those below 60) or Form 15H (for senior citizens) to the bank at the beginning of each financial year. This instructs the bank not to deduct TDS on your FD interest. Submit this in April every year — not after TDS is deducted, as that money then has to wait for refund.

Tax-Saving FD (Section 80C): A 5-year FD at any scheduled bank qualifies for Section 80C deduction up to ₹1.5 lakh per year. However, the interest earned on this FD is still fully taxable. The lock-in period is strict — no premature withdrawal allowed for 5 years. Under the old tax regime, the 80C deduction remains valuable. Under the new regime (which most salaried individuals now choose), this deduction is not available, making tax-saving FDs less compelling than before.

Accrual vs Receipt basis of taxation: FD interest is typically taxed on accrual basis under the Income Tax Act, not just when you actually receive it. This means even for a 3-year cumulative FD, you must declare the interest accrued each year in your ITR, not just in the maturity year. Many investors miss this and face a large tax demand when the FD matures. Always check your bank's Annual Information Statement (AIS) to see what interest they have reported to the income tax department.

Real-Life Scenario: Rahul's FD Decision in 2026

Rahul is a 34-year-old software engineer in Pune with a monthly take-home of ₹1.1 lakh. He has ₹8 lakh sitting in a savings account earning just 3% interest, and he has decided it is time to put this money to work. He does not need this money for at least 3 years. His total annual income is ₹18 lakh, placing him in the 30% tax bracket.

Rahul's decision framework:

Option 1 — Split across banks (Recommended): Put ₹5 lakh in Unity SFB at 9% (covered by DICGC), and ₹3 lakh in HDFC Bank at 7.4% (large bank for peace of mind). Average blended rate: approximately 8.4%.

Option 2 — All in SBI: ₹8 lakh at 7.1% in SBI. Safe, simple, but lower return.

Option 3 — Bajaj Finance NBFC FD: 8.5% for the full ₹8 lakh. Best nominal rate but no DICGC cover.

Let us calculate the 3-year returns for Rahul under Option 1:

After paying 30% tax on ₹2,21,678 interest = ₹66,503 in taxes, Rahul's net gain is ₹1,55,175 over 3 years. Compare this to leaving the money in a savings account at 3%: he would have earned approximately ₹73,636 in 3 years (taxable), giving a net gain of just ₹51,545. The FD strategy adds roughly ₹1,03,630 more to Rahul's wealth over 3 years — that is a substantial difference with zero additional risk relative to the savings account.

The tax lesson for Rahul: At 30% tax, his post-tax FD return on the Unity SFB portion drops from 9% to approximately 6.3%. This changes the comparison with other instruments significantly. A debt mutual fund with indexation (for old regime) or an equity SIP might deliver better post-tax returns. But FD wins on certainty — Rahul knows exactly what he will get, regardless of what markets do.

FD vs SIP vs RD vs Debt Mutual Fund — Which Is Better?

The honest answer: FD is not the best investment for long-term wealth creation — equity SIPs are. But FD is the best investment for money you cannot afford to lose — your emergency fund, a home purchase corpus for 3 years, a child's education fee due in 2 years. Use FDs for certainty, SIPs for growth.