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"Explore the latest fixed deposit interest rates in India for 2026. Read our blog to compare bank FD rates, tenure-wise returns, and senior citizen benefits."
Published: 7 January 2026
In a world where investment trends come and go, there is one financial tool that has retained its popularity among Indian Investors: the fixed deposit. Whether saving for education or building a safety net for retirement, the reliability of a fixed deposit has provided peace of mind for generations. As we step into 2026, the financial landscape continues to evolve, yet security and assured returns remain unchanged.
Understanding how to navigate FD interest rates is the first step towards making sure your hard-earned money generates stable returns. This guide is designed to help you decode the complexities of the current market and secure the best possible returns for your future.
A fixed deposit is a financial instrument offered by banks and non-banking financial companies (NBFCs) that allows you to deposit a sum of money of your choice for a predetermined time at a fixed interest rate. Fixed deposit, as opposed to market-linked investments such as stocks and mutual funds, is an investment option that is free from the impacts of market fluctuations. You can be sure of the payout at the end of the term, hence it is an essential tool for goal-oriented financial planning.
As it is the year 2026, the global economy is undergoing monetary policy changes, and Indian investors are looking for more secure investments. The fixed deposit then becomes a safety net, allowing your savings to grow safely, regardless of whether the market rises or falls.
Want to calculate your FD returns? Use our FD Calculator to estimate maturity value and interest earnings instantly.
👉 https://www.mymudra.com/calculator/fixed-deposit-calculator
You might wonder why fixed deposit rates vary so much between a large public sector bank and a newer small finance bank. Several factors play a role in this:
1. RBI Repo Rate: The Reserve Bank of India’s policy rates are the primary driver. If the repo rate is high, banks usually offer better returns on deposits. As of the current RBI policy repo rate is 5.25%
2. Liquidity Needs: Banks that need to raise capital quickly to fund their lending operations often offer FD rates that are slightly higher than the market average to attract depositors.
3. Tenure: Generally, the longer you stay invested, the better the fixed deposit interest rate some banks may offer.
4. Inflation: Inflation rates may influence banks to adjust their rates to ensure that the real rate of return (interest minus inflation) remains attractive for the common man.
To help you make an informed choice, below is a compiled comparison of the projected and current rates offered across different segments. It is always wise to compare before you commit your funds to a fixed deposit.
|
Bank Name |
Regular Citizen (p.a.) |
Senior Citizen (p.a.) |
Tenure |
|
State Bank of India (SBI) |
3.05%–7.05% |
3.55%–7.05% |
Up to 10 Years |
|
HDFC Bank |
2.75%–6.45% |
3.25%–6.95% |
Up to 10 Years |
|
ICICI Bank |
2.75%-6.50% |
3.25%-7.10% |
Up to 10 Years |
|
Axis Bank |
6.15%-6.60% |
6.65%-7.10% |
Up to 2 Years |
|
Central Bank of India |
3.50%-6.50% |
4%-7% |
Up to 10 Years |
Top-rated NBFCs provide competitive pricing, along with the ease and convenience of digital onboarding. Here are some of the best FD rates:
|
Institution Name |
Regular Citizen (p.a.) |
Senior Citizen (p.a.) |
Key Benefit |
|
Unity Small Finance Bank |
4.0%-6.75% (up to 10 years) |
4.0%-7.25% (up to 5 years) |
Highest returns on special tenures (501, 701, 1001 days) |
|
Equitas Small Finance Bank |
7.0%-7.30% (up to 5 years) |
7.80% (around 2–3 years, incl. 888 days) |
888 days special FD; strong digital reach & app-based FD opening |
|
Bajaj Finance (NBFC) |
6.41%–6.95% for 24–60 months |
6.74%–7.30% for 24–60 months |
High credit rating (AAA) and strong brand trust |
|
Shriram Finance (NBFC) |
Up to 8.15% (up to 60 months) |
Up to 8.20% (up to 60 months) |
Flexible payouts; cumulative and non‑cumulative options with senior/women bonuses |
When searching for the best fixed deposit rates, it is important to look beyond just the percentage. Your life stage and financial goals should dictate your choice of fixed deposit.
Most institutions offer an additional 0.50% to 0.75% interest to those above 60. This makes a fixed deposit the preferred choice for regular monthly income via the "Non-Cumulative" option. If you are looking for the best fixed deposit interest rate for your parents with a safety net, look for options with DICGC cover up to ₹5 Lakhs.
If you are parking funds for a house down payment or a wedding, a 1-year fixed deposit is ideal. Private banks often have special tenures (like 400 days) that offer the best FD interest rates in the short-term category.
Under Section 80C of the Income Tax Act, you can invest in a 5-year fixed deposit to claim a deduction of up to ₹1.5 Lakh. While the interest is taxable, the upfront tax saving is a significant boost to your overall wealth.
When investing in a fixed deposit, choosing the right interest payout option is just as important as selecting the interest rate.
In this option, the interest earned is reinvested and compounded at regular intervals, usually quarterly. The total amount, principal plus interest, is paid out at maturity. This option is suitable for investors who do not need regular income and want to maximise returns over the long term.
A non-cumulative FD pays out interest at regular intervals such as monthly, quarterly, half-yearly, or annually. This option is ideal for individuals who require a steady income stream, including retirees or those using FD interest to meet routine expenses.
While monthly payouts provide consistent cash flow, quarterly payouts generally offer slightly better effective returns due to less frequent interest outflow.
The ideal payout structure depends on your financial goals, cash flow needs, and investment horizon. Investors focused on wealth accumulation may prefer cumulative FDs, while income-oriented investors may benefit more from non-cumulative options.
Follow these tips to obtain maximum returns from your FD:
A prosperous financial future is a combination of both security and growth. Among the numerous investment options available, fixed deposits still play an important role in proper financial planning. If you keep an eye on the latest rates and pick the right financial institution, your savings will not only grow but also get an incremental interest over time, thanks to the right kind of financial institution and your keeping an eye on the latest rates.
Learn more about investment options, and stay updated on deposit rates and terms with My Mudra.
Also Read:
- Calculate Your EMI Using the Personal Loan EMI Calculator
- What is NMI (Net Monthly Income) & How to Calculate It?
With a cumulative FD, the interest is compounded, and after that, the principal and interest are paid at maturity; thus, the benefit of compounding is obtained. A non-cumulative FD, on the other hand, pays out interest regularly through periodic instalments on a monthly, quarterly, or annual basis, which makes it advantageous for those who require a constant income source.
In general, it is safe because the RBI oversees Small Finance Banks. Furthermore, deposits of these banks are insured by the DICGC (Deposit Insurance and Credit Guarantee Corporation) for a sum of ₹5 Lakhs per depositor, thus both principal and interest are covered.
The answer is yes; a lot of banks and NBFCs have now started offering Standalone FDs where KYC can be done digitally, and the deposit can be funded through UPI or Net Banking. However, possessing a savings account typically speeds up the process and makes the maturity payout more convenient.
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