Top FD Interest Rates in India – May 2025 (Comprehensive Guide)

Fixed deposits (FDs) continue to be one of the safest and most popular investment choices among Indians. With the Reserve Bank of India keeping the repo rate unchanged in early 2025, banks have updated their FD interest offerings to attract depositors. This blog offers an up-to-date comparison of top FD rates across banks in India, with insights tailored to general investors, senior citizens, and low-risk savers.

In this guide, you'll find

Latest FD interest rates across small finance, private, and public sector banks
Exclusive senior citizen rates
Tips to maximize your returns
FAQs and safety insights

Why Choose Fixed Deposits in 2025?

Despite the rise of mutual funds, SIPs, and stock market-linked investments, fixed deposits hold strong for several reasons:

Capital protection—FDs are not subject to market volatility.
Predictable returns—fixed interest does not change.
Ease of investment—available in almost every bank.
Flexible tenure—ranges from 7 days to 10 years.
Senior citizen benefits—higher rates and special schemes.

Want to compare FDs with mutual funds,? Read our guide on mutual funds vs. fixed deposits—which is better in 2025?

Top FD Interest Rates by Bank Type

Small Finance Banks

These banks are aggressively offering higher returns to expand their customer base. However, best FD interest rate small banks May 2025

Bank	Interest (General)	Senior Citizens	Tenure
Unity Small Finance Bank	9.00%	9.50%	1001 Days
Suryoday SFB	9.10%	9.60%	5 Years
Northeast SFB	9.00%	9.50%	3–5 Years
Utkarsh SFB	8.50%	9.00%	1500 Days
Equitas SFB	8.25%	8.75%	888 Days

Check latest rates for small finance banks

Private Sector Banks

These banks strike a balance between safety and competitive returns.

Bank	Interest (General)	Senior Citizens	Popular Tenure
ICICI Bank	7.25%	7.85%	1–2 Years
HDFC Bank	7.40%	7.90%	1 Year
Axis Bank	7.00%	7.50%	1 Year
Kotak Bank	7.25%	7.75%	1 Year
Bandhan Bank	7.25%	7.75%	1 Year

Compare FD rates from private sector banks

Public Sector Banks

Backed by the Government of India, PSU banks offer great stability, albeit with slightly lower rates.

Bank	Interest (General)	Senior Citizens	Tenure
SBI	6.50%	7.00%	1 Year
Bank of Baroda	6.50%	7.00%	1 Year
PNB	6.50%	7.00%	1 Year
Canara Bank	6.50%	7.00%	1 Year
Union Bank	6.50%	7.00%	1 Year

Latest PSU FD interest rates

Best FD Rates for Senior Citizens

Senior citizens not only receive an additional 0.50% interest but can also access exclusive government-backed savings options.

Institution	Interest Rate	Special Notes
Unity SFB	9.50%	Highest in market
Suryoday SFB	9.60%	For 5-year tenure
North East SFB	9.50%	Safe tenures
SCSS (Post Office)	8.20%	Backed by Govt. of India

Senior Citizens Savings Scheme (SCSS) details

FD Interest Rate Comparison Table

For convenience, here is a consolidated list of top interest rates in May 2025:

Bank	Interest (General/Senior)	Tenure
Unity SFB	9.00% / 9.50%	1001 days
Suryoday SFB	9.10% / 9.60%	5 years
Northeast SFB	9.00% / 9.50%	3–5 years
ICICI Bank	7.25% / 7.85%	1–2 years
SBI	6.50% / 7.00%	1 year

How to Calculate FD Returns

Formula for FD Calculation:

Maturity Amount = P × (1 + r/n)ⁿᵗ

Where:

P = Principal amount (e.g., ₹1,00,000)
r = Annual interest rate (e.g., 0.08 for 8%)
n = Number of times interest is compounded in a year
t = Investment duration in years

Example:

If you invest ₹1,00,000 in an FD at 8.5% interest compounded quarterly for 3 years:

P = ₹1,00,000
r = 8.5% = 0.085
n = 4 (quarterly)
t = 3

Maturity = ₹1,00,000 × (1 + 0.085/4)^(4×3) ≈ ₹1,27,000

Want to simplify this? Use our FREE FD Calculator Tool!

Taxation & TDS on FDs

All FD earnings are taxable under the Income from Other Sources head.

What you should know:

TDS applies if interest exceeds ₹40,000/year (₹50,000 for seniors).
Submit Form 15G/15H to avoid TDS (if your income is below the taxable limit).
Interest income is taxed as per your income slab.

Download Form 15G/15H

Are FDs Safe? Understanding DICGC Cover

The Deposit Insurance and Credit Guarantee Corporation (DICGC) insures your FD up to ₹5 lakh per bank per person.

Key Points:

Applies to all scheduled banks (including SFBs).
Covers both principal and interest.
No paperwork is needed; coverage is automatic.

Official DICGC FAQ

Tips to Maximize FD Returns

FD Laddering: Invest in multiple FDs with staggered maturity dates to avoid reinvestment risk.
Use small finance banks: Get better rates while staying within ₹5 lakh per bank to stay insured.
Opt for Quarterly or Annual Compounding: Compounding earns more than simple interest.
Track inflation: Lock into higher rates when inflation peaks.
Compare online: Use platforms like BankBazaar for real-time FD comparisons.

Infographic showing the best fixed deposit (FD) interest rates in India for May 2025 across small finance, private, and public sector banks

A visual comparison of top FD interest rates in India for May 2025, categorized by bank type and including tips for senior citizens and safe investing

FAQ

Q1: Can I break my FD before maturity?
Yes, but a penalty of 0.5%–1% may apply depending on the bank.

Q2: Are FD returns guaranteed?
Yes, provided the bank remains solvent. Use DICGC-insured banks for added safety.

Q3: Are cooperative bank FDs safe?
Some are DICGC-insured, but they carry slightly higher risk. Confirm before investing.

Q4: What is the best FD for a ₹1 lakh investment in 2025?
Unity or Suryoday SFB offers the highest return (~₹1.27 lakh after 3 years).

Final Thoughts

FDs remain a solid pillar in any investor’s portfolio in 2025. Whether you are a retiree looking for stable income or a working professional aiming to protect your savings, the best FD interest rates in India today provide many opportunities.

Before investing:

Evaluate the bank’s credibility.
Ensure DICGC coverage.
Compare returns and tenure.
Consider taxation and liquidity needs.

By strategically choosing the right institution and tenure, you can maximize FD returns while ensuring complete peace of mind.

Disclaimer:

The information provided in this blog is for educational and informational purposes only. Interest rates and financial data are subject to change without notice. Please verify current rates with the respective banks before investing. Investments in fixed deposits are subject to terms and conditions set by the banks and financial institutions. We do not provide financial advice—consult a certified financial advisor for personalized guidance.

Also Read Most Related Topics: