Best FD Rates in India — June 2026 (All Banks Compared)

FD Rates at a Glance — June 2026

Here is where major banks stand as of late May 2026. Rates are for general, non-senior customers on standard tenures of 1 to 3 years. Senior citizens receive an additional 0.25% to 0.75% on top of these rates at most banks.

Small Finance Banks currently lead the rate charts. Jana Small Finance Bank and Suryoday Small Finance Bank are both offering up to 8.10% to 8.11%. Shivalik Small Finance Bank reaches 8.30% on select tenures. Ujjivan SFB is at 7.20%, and AU Small Finance Bank at 7.00%. All of these are RBI-regulated and DICGC-insured.

Among private banks, Bandhan Bank leads at 7.25%, followed by RBL Bank at 7.20% and Yes Bank at 7.00%. The largest private banks, HDFC, ICICI, and Axis, are in the 6.45% to 6.50% range. Public sector banks are the most conservative: SBI is at 6.45%, while most other PSU banks are at 6.60%.

• Jana SFB: 8.11% | Suryoday SFB: 8.10% | Utkarsh SFB: 8.10%
• Shivalik SFB: 8.30% on select tenures | Unity SFB: up to 8.00%
• Bandhan Bank: 7.25% | RBL Bank: 7.20% | Yes Bank: 7.00%
• HDFC Bank: 6.50% | ICICI Bank: 6.50% | Axis Bank: 6.45%
• PNB: 6.60% | BoB: 6.60% | Canara: 6.60% | SBI: 6.45%

What the Rate Difference Actually Means in Rupees

The gap between 6.45% at SBI and 8.11% at Jana SFB sounds small when stated as a percentage. It does not feel small when converted into rupees.

On Rs.5 lakh deposited for 3 years: at SBI at 6.45%, your maturity value is approximately Rs.6,03,845 and interest earned Rs.1,03,845. At Jana SFB at 8.11%, maturity value is approximately Rs.6,32,107 and interest earned Rs.1,32,107. The difference is Rs.28,262 in additional interest for the exact same amount and tenure.

On Rs.10 lakh for 5 years, the gap exceeds Rs.98,000 in additional interest. This is real money that most people leave on the table by defaulting to brand familiarity.

• Rs.1 lakh for 2 years: SBI about Rs.13,300 interest vs Jana SFB about Rs.16,900, a gain of Rs.3,600
• Rs.5 lakh for 3 years: SBI about Rs.1,03,845 vs Jana SFB about Rs.1,32,107, a gain of Rs.28,262
• Rs.10 lakh for 5 years: SBI about Rs.3,77,000 vs Jana SFB about Rs.4,75,000, a gain of about Rs.98,000
• Senior citizens: the gap is even wider since SFBs also offer higher senior rates

Are Small Finance Banks Safe? The Honest Answer

This is the right question. Small finance banks are RBI-regulated banks, not shadow banks, not NBFCs, not chit funds. They hold a full banking licence issued by RBI and operate under the same regulatory supervision as SBI and HDFC Bank.

The critical safety net is DICGC insurance. All deposits in any RBI-scheduled bank in India, SBI, HDFC, or Jana Small Finance Bank, are insured up to Rs.5 lakh per depositor per bank by DICGC, a subsidiary of RBI. If a bank fails, you receive up to Rs.5 lakh back. This protection applies equally to deposits in large banks and small finance banks.

For amounts above Rs.5 lakh, the risk profile is different. There is no deposit insurance on amounts above this limit at any bank. The prudent approach for larger amounts is to spread across multiple banks, keeping each bank's total below Rs.5 lakh.

Historical track record: no small finance bank has failed since the category was established by RBI in 2015. However, small finance banks are smaller institutions focused on underserved borrowers and they carry modestly higher credit risk than a large PSU bank. For the portion of your savings that can stay within Rs.5 lakh per bank, this risk is mitigated by DICGC insurance.

• All SFBs are RBI-regulated and hold full banking licences
• DICGC insures deposits up to Rs.5 lakh per depositor per bank, same as SBI
• Keep each bank's FD below Rs.5 lakh to stay fully within insurance coverage
• Check RBI's official list of scheduled banks before depositing
• Avoid unregulated entities and invest only in DICGC-covered scheduled banks

Senior Citizen FD Rates — Up to 9.5% in 2026

Senior citizens, 60 years and above, receive an additional 0.25% to 0.75% above general rates at most banks, a benefit meant to support retired individuals who depend on FD income.

As of May 2026, Unity Small Finance Bank is offering up to 9.50% for senior citizens on select tenures. Suryoday and Utkarsh SFBs are at approximately 8.60%. SBM Bank among private banks is offering 8.35% for seniors. Even the major private banks like Yes Bank and Bandhan Bank are at 7.50% to 7.75% for senior citizens.

For a retired household with Rs.25 lakh in FDs, the difference between parking it all at SBI at a 7.10% senior rate versus spreading it across high-rate SFBs at 8.60% senior rate can mean Rs.37,500 extra per year, or over Rs.3,000 more per month in interest income.

How to Decide Where to Put Your FD — A Simple Framework

Step 1: Know your amount. For Rs.5 lakh or less per bank, go for the highest-rate RBI-scheduled SFB you are comfortable with because you are fully insured. For more than Rs.5 lakh total, split into multiple FDs of Rs.5 lakh or less across different banks. Four Rs.5 lakh FDs across four different banks give you Rs.20 lakh of fully insured savings at high rates.

Step 2: Verify the bank. Confirm the bank appears on RBI's official list of scheduled commercial banks at rbi.org.in. Check if it has an external credit rating such as CRISIL or ICRA. Prefer SFBs that have been operational for at least 3 to 5 years.

Step 3: Match tenure to your actual need. Do not lock money you might need early into a 3-year FD for a 0.20% higher rate. Premature withdrawal penalties of 0.50% to 1.00% can wipe out the advantage. If unsure, pick a 1-year FD and renew it.

Step 4: Calculate post-tax return. FD interest is taxable at your slab rate. If you are in the 30% bracket, an 8.11% FD yields approximately 5.67% after tax. PPF at 7.10% is tax-free and beats this on a post-tax basis for high earners. Always compare on a post-tax basis for large deposits.

• Rs.5 lakh or less per bank: go for the highest rate SFB, fully insured under DICGC
• Above Rs.5 lakh total: split across multiple banks, max Rs.5 lakh per bank
• 30% tax bracket: compare SFB FD post-tax vs PPF or ELSS before deciding
• May need money early: choose 1-year tenure over a higher-rate 3-year FD
• Senior citizen: Unity SFB and Suryoday SFB currently lead for maximum safe returns
• Want digital convenience: AU SFB and Ujjivan SFB have stronger digital experiences

NBFC FDs — Bajaj Finance and Shriram Finance: Better or Riskier?

Non-banking financial companies like Bajaj Finance and Shriram Finance also offer FDs at competitive rates. Bajaj Finance is offering approximately 7.40% to 8.05% on select tenures, and Shriram Finance is offering up to 8.90% on certain products.

The fundamental difference is that NBFC FDs are not covered by DICGC deposit insurance. There is no government-backed guarantee on Bajaj Finance or Shriram Finance deposits. If these companies face severe financial stress, your deposit is not protected the way bank deposits are.

This does not make NBFC FDs automatically bad. Bajaj Finance holds AAA credit ratings and has a strong operating track record. But the risk profile is structurally different from a bank FD. For conservative investors who prioritise capital protection, DICGC-covered bank FDs, including small finance banks, are more appropriate. NBFCs are suitable only if you understand and accept that the credit risk rests entirely on the company's financial health.

Tax on FD Interest — What Most People Get Wrong

FD interest is taxable as income at your applicable slab rate in the year it accrues, not just when you receive it at maturity. If you have a 3-year cumulative FD, you must declare the interest that accrues each year in your ITR, even though the bank pays it only at maturity.

Banks deduct TDS at 10% when your total interest income from that bank exceeds Rs.40,000 in a financial year, or Rs.50,000 for senior citizens. This TDS is a prepayment of tax, not your full liability. If you are in the 30% slab, you owe an additional 20% when filing your ITR.

If your total income is below the basic exemption limit, submit Form 15G if you are under 60 years or Form 15H if you are a senior citizen to your bank at the start of each financial year. This prevents TDS deduction and avoids the hassle of claiming refunds.

• Declare FD interest every year in ITR, even for cumulative FDs that pay only at maturity
• TDS at 10% when annual interest exceeds Rs.40,000 per bank, or Rs.50,000 for seniors
• Submit Form 15G or 15H at the start of the year if income is below the exemption limit
• 30% taxpayer: post-tax return on 8.11% FD is only about 5.67%, so compare with tax-free alternatives
• Interest on post office FDs is also fully taxable under the same rules

When an FD Actually Makes Sense — and When It Does Not

FDs make sense when you have a specific financial goal in 1 to 5 years and cannot risk any capital loss, you are a retired individual who needs a predictable monthly income, you are building an emergency fund that needs to beat savings account rates, or you are in a lower tax bracket where the post-tax FD return meaningfully exceeds inflation.

FDs are less appropriate when your horizon is 7+ years and you can handle equity volatility because index funds will very likely outperform, you are in the 30% tax bracket where 5.67% post-tax barely covers inflation, or the money might be needed at short notice because liquid funds offer better accessibility without exit penalties.

The balanced approach for most households is emergency funds in a liquid fund for instant access, short-to-medium goals from 1 to 5 years in high-rate SFB FDs spread across multiple banks, long-term goals in equity index funds, and retirement income supplemented by SGBs and carefully spread FDs.