1-year vs 3-year vs 5-year Fixed Deposits: Which FD tenure gives the highest returns today?
Choosing the right fixed deposit tenure can significantly impact your returns, as interest rates vary across one-year, three-year and five-year deposits. While shorter tenures offer greater liquidity, longer-term FDs may provide higher returns depending on the bank and prevailing interest rate cycle.
- Jul 14, 2026,
- Updated Jul 14, 2026 6:35 AM IST
Choosing the right fixed deposit (FD) tenure can significantly impact your returns, with interest rates varying widely across banks. While some lenders offer their best rates on shorter tenures, others reward investors willing to lock in their money for three or five years.
Fixed deposits (FDs) continue to be among the most preferred investment options for risk-averse investors seeking assured returns. However, deciding the right tenure can be just as important as choosing the right bank, as interest rates differ considerably across one-year, three-year and five-year deposits.
Data as of July 8, 2026, shows that Small Finance Banks (SFBs) continue to dominate the FD rate charts, while several private and public sector banks are also offering competitive returns across different maturities.
One-year FDs
For investors looking for liquidity without sacrificing returns, one-year FDs remain an attractive option.
Among all banks, Unity Small Finance Bank offers the highest 1-year FD rate of 7.50%, followed by Suryoday Small Finance Bank (7.25%), Ujjivan Small Finance Bank (7.25%), Equitas Small Finance Bank (7.10%) and SBM Bank (7.10%).
Among private banks, Tamilnad Mercantile Bank leads with 6.80%, followed by Jammu & Kashmir Bank (6.80%), IndusInd Bank (6.75%), YES Bank (6.65%) and City Union Bank (6.65%).
Public sector banks continue to offer relatively lower returns. Bank of India and Indian Overseas Bank top the segment at 6.50%, followed by Bank of Baroda, Canara Bank, Punjab National Bank and State Bank of India, which offer rates between 6.10% and 6.25%.
MUST READ: Top 5-year fixed deposit rates in July: Suryoday SFB offers 8%, SBM Bank leads among private lenders
Three-year FDs
Three-year deposits currently offer some of the most attractive interest rates across banks.
Jana Small Finance Bank tops the list with 8.00%, followed by Utkarsh Small Finance Bank and Shivalik Small Finance Bank at 7.50% each. AU Small Finance Bank and IDFC FIRST Bank also offer 7.40% and 7.35%, respectively.
Among private lenders, IDFC FIRST Bank provides the highest 3-year FD rate of 7.35%, ahead of RBL Bank (7.20%), SBM Bank (7.10%) and YES Bank (7.00%).
Most public sector banks offer between 6.00% and 6.70%, with Bank of India leading the category at 6.70%.
MUST READ: Planning a 3-year fixed deposit? These banks and NBFCs offer best FD interest rates in 2026
Five-year FDs
For investors with longer investment horizons, five-year FDs continue to provide stable returns while also serving as a preferred tenure for long-term financial planning.
Among all lenders, Suryoday Small Finance Bank offers the highest 5-year FD rate of 7.90%, followed by Jana Small Finance Bank (7.77%), DCB Bank (7.50%), Ujjivan Small Finance Bank (7.20%) and Utkarsh Small Finance Bank (7.00%).
Among private sector banks, DCB Bank leads with 7.50%, while IDFC FIRST Bank, Jammu & Kashmir Bank, YES Bank and Tamilnad Mercantile Bank offer rates between 6.70% and 6.75%.
Public sector banks remain more conservative, with Bank of Baroda offering the highest 5-year FD rate of 6.30%, followed by Canara Bank (6.25%), Indian Overseas Bank (6.10%), Punjab National Bank (6.10%) and State Bank of India (6.05%).
Top 5 Banks for 1-Year Fixed Deposits
| Rank | Bank | 1-Year FD Rate (% p.a.) |
|---|---|---|
| 1 | Unity Small Finance Bank | 7.50% |
| 2 | Suryoday Small Finance Bank | 7.25% |
| 2 | Ujjivan Small Finance Bank | 7.25% |
| 4 | Equitas Small Finance Bank | 7.10% |
| 4 | SBM Bank | 7.10% |
Top 5 Banks for 3-Year Fixed Deposits
| Rank | Bank | 3-Year FD Rate (% p.a.) |
|---|---|---|
| 1 | Jana Small Finance Bank | 8.00% |
| 2 | Utkarsh Small Finance Bank | 7.50% |
| 2 | Shivalik Small Finance Bank | 7.50% |
| 4 | AU Small Finance Bank | 7.40% |
| 5 | IDFC FIRST Bank | 7.35% |
Top 5 Banks for 5-Year Fixed Deposits
| Rank | Bank | 5-Year FD Rate (% p.a.) |
|---|---|---|
| 1 | Suryoday Small Finance Bank | 7.90% |
| 2 | Jana Small Finance Bank | 7.77% |
| 3 | DCB Bank | 7.50% |
| 4 | Ujjivan Small Finance Bank | 7.20% |
| 5 | Utkarsh Small Finance Bank* | 7.00% |
*Equitas Small Finance Bank and SBM Bank also offer 7.00% on five-year FDs.
Top 5 Banks for 5-Year Fixed Deposits
| FD Tenure | Highest Interest Rate | Bank |
|---|---|---|
| 1 Year | 7.50% | Unity Small Finance Bank |
| 3 Years | 8.00% | Jana Small Finance Bank |
| 5 Years | 7.90% | Suryoday Small Finance Bank |
Financial planners advise investors not to choose an FD solely based on the highest interest rate. Factors such as liquidity needs, investment goals, tax implications, premature withdrawal penalties and the financial strength of the bank should also be considered before locking in funds.
Senior citizens can further enhance returns, as most banks offer an additional 0.25% to 0.75% interest over regular FD rates. Investors should also note that deposits of up to ₹5 lakh per depositor per bank are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), providing an additional layer of safety.
MUST READ: Looking for the best FD? These banks are offering up to 8.10% interest in July 2026
Choosing the right fixed deposit (FD) tenure can significantly impact your returns, with interest rates varying widely across banks. While some lenders offer their best rates on shorter tenures, others reward investors willing to lock in their money for three or five years.
Fixed deposits (FDs) continue to be among the most preferred investment options for risk-averse investors seeking assured returns. However, deciding the right tenure can be just as important as choosing the right bank, as interest rates differ considerably across one-year, three-year and five-year deposits.
Data as of July 8, 2026, shows that Small Finance Banks (SFBs) continue to dominate the FD rate charts, while several private and public sector banks are also offering competitive returns across different maturities.
One-year FDs
For investors looking for liquidity without sacrificing returns, one-year FDs remain an attractive option.
Among all banks, Unity Small Finance Bank offers the highest 1-year FD rate of 7.50%, followed by Suryoday Small Finance Bank (7.25%), Ujjivan Small Finance Bank (7.25%), Equitas Small Finance Bank (7.10%) and SBM Bank (7.10%).
Among private banks, Tamilnad Mercantile Bank leads with 6.80%, followed by Jammu & Kashmir Bank (6.80%), IndusInd Bank (6.75%), YES Bank (6.65%) and City Union Bank (6.65%).
Public sector banks continue to offer relatively lower returns. Bank of India and Indian Overseas Bank top the segment at 6.50%, followed by Bank of Baroda, Canara Bank, Punjab National Bank and State Bank of India, which offer rates between 6.10% and 6.25%.
MUST READ: Top 5-year fixed deposit rates in July: Suryoday SFB offers 8%, SBM Bank leads among private lenders
Three-year FDs
Three-year deposits currently offer some of the most attractive interest rates across banks.
Jana Small Finance Bank tops the list with 8.00%, followed by Utkarsh Small Finance Bank and Shivalik Small Finance Bank at 7.50% each. AU Small Finance Bank and IDFC FIRST Bank also offer 7.40% and 7.35%, respectively.
Among private lenders, IDFC FIRST Bank provides the highest 3-year FD rate of 7.35%, ahead of RBL Bank (7.20%), SBM Bank (7.10%) and YES Bank (7.00%).
Most public sector banks offer between 6.00% and 6.70%, with Bank of India leading the category at 6.70%.
MUST READ: Planning a 3-year fixed deposit? These banks and NBFCs offer best FD interest rates in 2026
Five-year FDs
For investors with longer investment horizons, five-year FDs continue to provide stable returns while also serving as a preferred tenure for long-term financial planning.
Among all lenders, Suryoday Small Finance Bank offers the highest 5-year FD rate of 7.90%, followed by Jana Small Finance Bank (7.77%), DCB Bank (7.50%), Ujjivan Small Finance Bank (7.20%) and Utkarsh Small Finance Bank (7.00%).
Among private sector banks, DCB Bank leads with 7.50%, while IDFC FIRST Bank, Jammu & Kashmir Bank, YES Bank and Tamilnad Mercantile Bank offer rates between 6.70% and 6.75%.
Public sector banks remain more conservative, with Bank of Baroda offering the highest 5-year FD rate of 6.30%, followed by Canara Bank (6.25%), Indian Overseas Bank (6.10%), Punjab National Bank (6.10%) and State Bank of India (6.05%).
Top 5 Banks for 1-Year Fixed Deposits
| Rank | Bank | 1-Year FD Rate (% p.a.) |
|---|---|---|
| 1 | Unity Small Finance Bank | 7.50% |
| 2 | Suryoday Small Finance Bank | 7.25% |
| 2 | Ujjivan Small Finance Bank | 7.25% |
| 4 | Equitas Small Finance Bank | 7.10% |
| 4 | SBM Bank | 7.10% |
Top 5 Banks for 3-Year Fixed Deposits
| Rank | Bank | 3-Year FD Rate (% p.a.) |
|---|---|---|
| 1 | Jana Small Finance Bank | 8.00% |
| 2 | Utkarsh Small Finance Bank | 7.50% |
| 2 | Shivalik Small Finance Bank | 7.50% |
| 4 | AU Small Finance Bank | 7.40% |
| 5 | IDFC FIRST Bank | 7.35% |
Top 5 Banks for 5-Year Fixed Deposits
| Rank | Bank | 5-Year FD Rate (% p.a.) |
|---|---|---|
| 1 | Suryoday Small Finance Bank | 7.90% |
| 2 | Jana Small Finance Bank | 7.77% |
| 3 | DCB Bank | 7.50% |
| 4 | Ujjivan Small Finance Bank | 7.20% |
| 5 | Utkarsh Small Finance Bank* | 7.00% |
*Equitas Small Finance Bank and SBM Bank also offer 7.00% on five-year FDs.
Top 5 Banks for 5-Year Fixed Deposits
| FD Tenure | Highest Interest Rate | Bank |
|---|---|---|
| 1 Year | 7.50% | Unity Small Finance Bank |
| 3 Years | 8.00% | Jana Small Finance Bank |
| 5 Years | 7.90% | Suryoday Small Finance Bank |
Financial planners advise investors not to choose an FD solely based on the highest interest rate. Factors such as liquidity needs, investment goals, tax implications, premature withdrawal penalties and the financial strength of the bank should also be considered before locking in funds.
Senior citizens can further enhance returns, as most banks offer an additional 0.25% to 0.75% interest over regular FD rates. Investors should also note that deposits of up to ₹5 lakh per depositor per bank are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), providing an additional layer of safety.
MUST READ: Looking for the best FD? These banks are offering up to 8.10% interest in July 2026