Fixed Deposit (FD) remains one of the most trusted and popular investment options in India, offering guaranteed returns with capital protection. With interest rates fluctuating based on RBI's monetary policy, it is important to compare FD rates across banks before investing. This comprehensive guide compares FD interest rates from 15+ banks in 2026, including senior citizen rates, tax-saving FDs, Post Office FDs, and small finance bank rates.
Best FD Interest Rates 2026 — All Banks
Below is a detailed comparison of FD interest rates offered by major banks in India as of mid-2026 for general citizens. Rates are for deposits below ₹2 crore (bulk deposits above ₹2 crore may have different rates).
| Bank | 1 Year | 2 Years | 3 Years | 5 Years |
|---|---|---|---|---|
| SBI | 6.80% | 7.00% | 7.00% | 6.75% |
| HDFC Bank | 6.85% | 7.10% | 7.10% | 7.00% |
| ICICI Bank | 6.90% | 7.15% | 7.15% | 7.00% |
| Axis Bank | 6.85% | 7.10% | 7.10% | 7.00% |
| Kotak Mahindra | 6.75% | 7.00% | 7.00% | 6.75% |
| Punjab National Bank | 6.80% | 7.00% | 7.00% | 6.75% |
| Bank of Baroda | 6.75% | 7.00% | 7.00% | 6.75% |
| Canara Bank | 6.80% | 7.00% | 7.00% | 6.75% |
| Union Bank | 6.75% | 6.90% | 7.00% | 6.75% |
| Indian Bank | 6.80% | 7.00% | 7.00% | 6.75% |
| IDFC First Bank | 7.00% | 7.25% | 7.25% | 7.00% |
| IndusInd Bank | 7.00% | 7.25% | 7.25% | 7.00% |
| Bandhan Bank | 6.85% | 7.10% | 7.10% | 6.85% |
| Federal Bank | 6.90% | 7.15% | 7.15% | 6.90% |
| Yes Bank | 7.00% | 7.25% | 7.25% | 7.00% |
Note: Rates are indicative and subject to change. Always verify with the bank's official website before investing. Private banks like IDFC First, IndusInd, and Yes Bank generally offer 0.25-0.5% higher rates than public sector banks.
Highest FD Rates by Tenure
| Tenure | Best Rate | Bank |
|---|---|---|
| 1 Year | 7.00% | IDFC First, IndusInd, Yes Bank |
| 2 Years | 7.25% | IDFC First, IndusInd, Yes Bank |
| 3 Years | 7.25% | IDFC First, IndusInd, Yes Bank |
| 5 Years | 7.00% | HDFC, ICICI, Axis, IDFC First, IndusInd, Yes Bank |
Senior Citizen FD Rates
Senior citizens (aged 60 and above) receive an additional 0.25% to 0.75% on FD interest rates. This extra rate applies to most tenures across all banks. Here are the senior citizen FD rates from major banks:
| Bank | 1 Year | 3 Years | 5 Years | Extra Rate |
|---|---|---|---|---|
| SBI | 7.30% | 7.50% | 7.25% | +0.50% |
| HDFC Bank | 7.35% | 7.60% | 7.50% | +0.50% |
| ICICI Bank | 7.40% | 7.65% | 7.50% | +0.50% |
| Axis Bank | 7.35% | 7.60% | 7.50% | +0.50% |
| PNB | 7.30% | 7.50% | 7.25% | +0.50% |
Special senior citizen schemes: Some banks offer additional benefits for super senior citizens (aged 80+). SBI's "Wecare" scheme offers an additional 0.30% for senior citizens on tenures of 5 years and above. HDFC Bank and ICICI Bank also have special deposit schemes for senior citizens.
Senior citizens also benefit from a higher TDS threshold of ₹50,000 per year (vs ₹40,000 for general citizens) and can claim deduction under Section 80TTB up to ₹50,000 on interest income.
Tax-Saving FD (Section 80C)
A tax-saving Fixed Deposit is a special type of FD that offers tax deduction under Section 80C of the Income Tax Act. Key features:
- Lock-in period: 5 years (cannot be withdrawn prematurely)
- Deduction limit: Up to ₹1.5 lakh per financial year under Section 80C
- Loan against FD: Not allowed for tax-saving FDs
- Nomination: Available
- Interest taxation: The interest earned is fully taxable at your slab rate (only the principal qualifies for 80C deduction)
Tax-Saving FD Rates 2026
| Bank | Tax-Saving FD Rate | Senior Citizen Rate |
|---|---|---|
| SBI | 6.75% | 7.25% |
| HDFC Bank | 7.00% | 7.50% |
| ICICI Bank | 7.00% | 7.50% |
| Axis Bank | 7.00% | 7.50% |
| PNB | 6.75% | 7.25% |
Tax-saving FD vs ELSS: While tax-saving FDs offer guaranteed returns, ELSS mutual funds have historically delivered 12-15% returns over 5 years with only a 3-year lock-in. If you can tolerate market risk, ELSS is a better tax-saving option. If you want guaranteed returns, tax-saving FD is the safer choice.
Post Office FD Rates
Post Office Time Deposits (TD) are backed by the Government of India, making them one of the safest investment options. Post Office FD rates for 2026 are set by the government quarterly.
| Tenure | Rate (General) | Rate (Senior Citizen) |
|---|---|---|
| 1 Year | 6.9% | 6.9% (no extra) |
| 2 Years | 7.0% | 7.0% (no extra) |
| 3 Years | 7.1% | 7.1% (no extra) |
| 5 Years | 7.5% | 7.5% (no extra) |
Key benefits of Post Office FD:
- Government-backed — highest safety
- 5-year TD qualifies for Section 80C deduction
- Can be opened at any post office across India
- Minimum deposit: ₹1,000 (in multiples of ₹100)
- Interest is compounded quarterly and paid annually
Limitation: Post Office FD does not offer additional rates for senior citizens. However, the 5-year TD rate of 7.5% is competitive with most banks. Post Office FDs are ideal for conservative investors in rural areas where bank branches may not be easily accessible.
Small Finance Bank FD Rates
Small finance banks (SFBs) typically offer 0.5% to 1.5% higher FD rates than major commercial banks. They are regulated by the RBI and deposits are insured up to ₹5 lakh by DICGC, just like commercial banks.
| Small Finance Bank | 1 Year | 3 Years | 5 Years |
|---|---|---|---|
| Unity SFB | 7.75% | 8.25% | 8.00% |
| Equitas SFB | 7.50% | 8.00% | 7.75% |
| Ujjivan SFB | 7.50% | 8.00% | 7.75% |
| AU SFB | 7.25% | 7.75% | 7.50% |
| ESAF SFB | 7.25% | 7.75% | 7.50% |
| Jana SFB | 7.50% | 8.00% | 7.75% |
Are small finance banks safe? Yes, for deposits up to ₹5 lakh, they are as safe as any bank because DICGC insurance covers the same ₹5 lakh limit. For larger amounts, consider splitting across multiple banks. SFBs are ideal for investors seeking higher returns without moving to market-linked products.
How to Choose the Right FD
With so many options available, here is how to choose the best FD for your needs:
- Safety first: If you are investing more than ₹5 lakh, split across multiple banks to stay within DICGC insurance limits. Public sector banks are considered the safest, followed by large private banks, then small finance banks.
- Compare rates: Use the comparison tables above to find the best rate for your desired tenure. Don't just go with your existing bank — shopping around can earn you 0.5-1% more.
- Consider the tenure: FD rates typically peak at 2-3 year tenures. Unless you need money sooner, locking in for 2-3 years usually gives the best rate.
- Ladder your FDs: Split your investment across multiple FDs with different maturities (1 year, 2 years, 3 years). This ensures you have access to funds periodically and can reinvest at potentially higher rates.
- Check for special schemes: Many banks offer special FD schemes with higher rates for specific periods or customer categories (senior citizens, women, NRIs).
- Tax implications: Remember that FD interest is taxable at your slab rate. If you are in the 30% bracket, a 7% FD effectively gives you only 4.9% post-tax. Consider tax-saving FDs under 80C or other tax-efficient instruments if tax is a concern.
Want to calculate your FD returns?
Use our free FD Calculator to compute maturity amount, interest earned, and compare different banks and tenures instantly.
Use FD Calculator →Frequently Asked Questions
Which bank gives the highest FD interest rate in 2026?
Small finance banks like Unity Small Finance Bank, Equitas SFB, and Ujjivan SFB offer the highest FD rates, ranging from 7.5% to 8.75% for general citizens and up to 9.25% for senior citizens. Among major banks, ICICI Bank and HDFC Bank offer competitive rates around 7% to 7.25%.
What is the Post Office FD rate in 2026?
Post Office Time Deposit rates for 2026 are: 1 year — 6.9%, 2 years — 7.0%, 3 years — 7.1%, 5 years — 7.5%. The 5-year Post Office TD qualifies for Section 80C deduction. Post Office FDs are backed by the Government of India, making them one of the safest investment options.
Is FD safe in small finance banks?
Yes, deposits in small finance banks are insured up to ₹5 lakh per depositor per bank by the DICGC, same as commercial banks. For deposits up to ₹5 lakh, small finance banks are as safe as major banks. However, for larger amounts, it is advisable to spread deposits across multiple banks to stay within the insurance limit.
What is the difference between tax-saving FD and regular FD?
A tax-saving FD has a lock-in period of 5 years and qualifies for deduction under Section 80C up to ₹1.5 lakh. Premature withdrawal and loan against FD are not allowed for tax-saving FDs. Regular FDs have no lock-in (except premature withdrawal penalty) and no tax benefit on the principal amount.
How is TDS calculated on FD interest?
Banks deduct TDS at 10% (20% if PAN not provided) if your total FD interest income exceeds ₹40,000 per year (₹50,000 for senior citizens). TDS is deducted at the time of credit or payment, whichever is earlier. You can submit Form 15G/15H if your total income is below the taxable limit to avoid TDS.