In 2025, Fixed Deposits (FDs) remain one of the most trusted and stable investment options for risk-averse individuals in India. Whether you’re a retiree seeking steady returns or a young investor looking for secure growth, FDs continue to offer a reliable avenue. But with interest rates varying across banks, it’s crucial to know which bank gives the highest FD interest rate in 2025.
This guide covers top banks offering the best FD interest rates in 2025, a comparison of tenure options, tax implications, and expert tips to choose the right one.
📈 What is a Fixed Deposit?
A Fixed Deposit (FD) is a financial instrument where an investor deposits a lump sum for a fixed period and earns interest on it. The interest rate is predetermined and does not fluctuate during the tenure.
Key Benefits of FDs:
- Capital protection
- Assured returns
- Flexible tenures
- Tax-saving options under 80C
- Easy loan against FD
🏦 Types of Banks Offering FDs
- Public Sector Banks (PSBs) – SBI, PNB, Bank of Baroda, etc.
- Private Sector Banks – HDFC, ICICI, Axis Bank, etc.
- Small Finance Banks (SFBs) – AU, Ujjivan, Jana, etc.
- Regional Rural Banks (RRBs) – Grameena Banks, Cooperative Banks
- NBFCs & Corporates – Bajaj Finance, Mahindra Finance (Not technically “banks” but offer FD-like products)
🔝 Top 10 Banks with Highest FD Interest Rates in India (July 2025)
| Bank Name | Regular Interest Rate (Max) | Senior Citizen Rate | Tenure (in Days) |
|---|---|---|---|
| Utkarsh Small Finance Bank | 8.50% | 9.00% | 700 Days |
| Jana Small Finance Bank | 8.35% | 8.85% | 365 Days |
| Equitas Small Finance Bank | 8.20% | 8.70% | 888 Days |
| Ujjivan SFB | 8.00% | 8.50% | 12 Months |
| AU Small Finance Bank | 7.75% | 8.25% | 18 Months |
| Suryoday SFB | 7.85% | 8.35% | 999 Days |
| DCB Bank | 7.60% | 8.10% | 24 Months |
| RBL Bank | 7.55% | 8.05% | 15 Months |
| Yes Bank | 7.50% | 8.00% | 12-24 Months |
| IDFC FIRST Bank | 7.25% | 7.75% | 500 Days |
📝 Note: Rates are subject to change. Always confirm on the official bank website before investing.
💡 Why Small Finance Banks Offer Higher FD Rates
Small Finance Banks (SFBs) are relatively new entrants and are trying to attract deposits by offering higher interest rates. These banks are regulated by the RBI, making them safe for deposits up to ₹5 lakh under the DICGC insurance scheme.
👵 Highest FD Interest Rates for Senior Citizens in 2025
Senior citizens often get an additional 0.50% interest on FDs.
| Bank Name | Senior Citizen Rate | Tenure |
|---|---|---|
| Jana Small Finance Bank | 8.85% | 1 Year |
| Utkarsh SFB | 9.00% | 700 Days |
| Equitas SFB | 8.70% | 888 Days |
| SBI (Amrit Kalash Scheme) | 7.60% | 400 Days |
| ICICI Bank | 7.50% | 15 Months |
| HDFC Bank | 7.45% | 1-2 Years |
📊 FD Interest Rates in Top Private Banks (2025)
| Bank Name | Regular Rate | Senior Citizen Rate | Max Tenure |
|---|---|---|---|
| HDFC Bank | 7.25% | 7.75% | 5 Years |
| ICICI Bank | 7.20% | 7.70% | 10 Years |
| Axis Bank | 7.10% | 7.60% | 5 Years |
| Kotak Mahindra | 7.00% | 7.50% | 3 Years |
| IndusInd Bank | 7.40% | 7.90% | 2 Years |
🏛️ FD Rates in Public Sector Banks (2025)
| Bank Name | Regular Rate | Senior Citizen Rate | Tenure |
|---|---|---|---|
| SBI | 7.10% | 7.60% | 400 Days |
| Bank of Baroda | 7.00% | 7.50% | 1-2 Years |
| Punjab National Bank | 7.00% | 7.50% | 600 Days |
| Canara Bank | 7.05% | 7.55% | 555 Days |
| Union Bank | 7.00% | 7.50% | 1 Year |
🧾 Taxation on Fixed Deposits in 2025
- TDS (Tax Deducted at Source):
- If interest exceeds ₹40,000 (₹50,000 for senior citizens), 10% TDS is deducted.
- Taxable Income: Interest is added to your total income and taxed as per your slab.
- Form 15G/15H: Can be submitted to avoid TDS if your income is below the taxable limit.
🔄 Cumulative vs Non-Cumulative FDs
| Feature | Cumulative FD | Non-Cumulative FD |
|---|---|---|
| Payout | At maturity | Monthly/Quarterly/Annually |
| Ideal For | Long-term investors | Regular income seekers |
| Interest Benefit | Higher due to compounding | Lower than cumulative |
🛡️ How Safe Are These Banks?
While private and SFBs offer attractive rates, safety is a top concern. Here’s how you’re protected:
- RBI Regulation: All banks listed are RBI-licensed.
- DICGC Insurance: Deposits up to ₹5 lakh (principal + interest) are insured.
- CRISIL/ICRA Ratings: NBFCs offering FDs should have high safety ratings.
⚠️ Always diversify FD investments across institutions to reduce risk.
📝 Tips to Choose the Best FD in 2025
- Compare interest rates and tenure – Longer may not always mean higher.
- Check flexibility in premature withdrawal.
- Senior citizens should take advantage of extra rates.
- Choose tax-saving FDs for 80C benefits (5-year lock-in).
- Avoid putting entire savings in one bank.
📥 How to Open a Fixed Deposit Online?
Opening an FD is now a 100% digital process with most banks:
Steps:
- Login to your bank’s mobile or net banking portal.
- Choose ‘Open FD’ or ‘Term Deposit’ option.
- Select amount, tenure, and payout frequency.
- Confirm and submit – FD is created instantly.
Many fintech platforms like Groww, Paytm, Bajaj Finserv, and Kuvera also allow opening FDs from multiple banks in one place.
🎯 Best Bank for FD in 2025 – Final Verdict
| Investor Type | Best Bank to Choose |
|---|---|
| High return seekers | Utkarsh SFB, Jana SFB, Equitas SFB |
| Senior Citizens | Jana SFB, SBI, ICICI Bank |
| Safety-first investors | SBI, HDFC, ICICI |
| Monthly income seekers | RBL, IndusInd, DCB Bank |
| Tax-saving investors | HDFC, SBI, ICICI (5-year Tax Saver FD) |
🧠 Frequently Asked Questions (FAQs)
Q1. Which bank gives the highest FD interest in 2025?
Utkarsh Small Finance Bank offers the highest FD interest rate of 8.50% (9.00% for seniors) for 700-day tenure.
Q2. Are Small Finance Banks safe?
Yes, they are regulated by RBI and deposits up to ₹5 lakh are insured by DICGC.
Q3. What is the maximum FD interest rate for senior citizens?
As of July 2025, Jana SFB and Utkarsh SFB offer up to 9.00% for seniors.
Q4. Can I open multiple FDs in different banks?
Absolutely. It’s recommended to diversify across banks and tenures.
📌 Conclusion
FDs continue to be a low-risk, high-trust investment option in 2025. While public and private sector banks offer stability, Small Finance Banks are offering lucrative rates of up to 9%. Choose wisely based on your risk appetite, tenure preference, and income goals. Whether you seek monthly income or capital appreciation, there’s an FD option for everyone.