Planning a 3-year fixed deposit? These banks and NBFCs offer best FD interest rates in 2026
Planning to invest in a three-year fixed deposit in 2026? Several banks and NBFCs are offering attractive interest rates, with senior citizens earning up to 8.00% per annum on select FD schemes.
- Jul 13, 2026,
- Updated Jul 13, 2026 8:05 AM IST
Fixed deposits (FDs) continue to be one of the most preferred investment options for Indians seeking stable returns with minimal risk. If you're planning to park your money in a three-year FD in 2026, comparing interest rates across banks and finance companies can help maximise your returns.
With interest rates remaining attractive across several small finance banks and non-banking financial companies (NBFCs), investors have multiple options to earn higher returns while keeping their investments relatively secure. Senior citizens, in particular, continue to enjoy additional interest benefits.
Among institutions accepting deposits below ₹2 crore, Shriram Finance currently offers the highest interest rate on a three-year fixed deposit. The company pays 7.50% per annum to general investors and 8.00% per annum to senior citizens.
Among banks, AU Small Finance Bank offers one of the highest rates at 7.10% for general customers and 7.29% for senior citizens.
Small Finance Banks on the top
Small finance banks have consistently offered higher FD rates than many commercial banks to attract retail deposits.
Besides AU Small Finance Bank, Equitas Small Finance Bank offers 7.00% per annum to general depositors and 7.50% to senior citizens for a three-year tenure.
Both banks provide flexible interest payout options and premature withdrawal facilities, making them suitable for investors who may require liquidity before maturity.
NBFCs remain competitive
Finance companies also continue to offer attractive returns on fixed deposits.
Shriram Finance tops the list with 7.50% for general citizens and 8.00% for senior citizens. It also offers flexible payout options, including monthly, quarterly, half-yearly, yearly and cumulative interest payments. Women depositors are eligible for an additional 0.50 percentage point on eligible deposits.
Mahindra Finance offers 7.00% for general investors and 7.35% for senior citizens under its Samruddhi Cumulative Deposit Scheme. The interest is compounded annually.
Similarly, Sundaram Finance offers 7.00% for general customers and 7.50% for senior citizens, along with nomination and premature withdrawal facilities.
MUST READ: SBI vs other public sector banks: Which PSU bank offers the highest FD interest rates in July 2026?
Public Sector Banks offer stability
While public sector banks generally offer lower interest rates than small finance banks and NBFCs, they remain popular because of their strong brand value and extensive branch network.
Canara Bank currently offers 6.25% per annum for general depositors and 6.75% for senior citizens on a three-year FD. Premature withdrawal is permitted, although deposits below ₹2 crore attract a 1% penalty.
DID YOU KNOW: Looking for the best FD? These banks are offering up to 8.10% interest in July 2026
Punjab & Sind Bank offers 5.85% for general investors and 6.35% for senior citizens.
Best 3-Year FD Interest Rates (Deposits below ₹2 crore)
| Bank/Company | General | Senior Citizens |
|---|---|---|
| Shriram Finance | 7.50% | 8.00% |
| AU Small Finance Bank | 7.10% | 7.29% |
| Mahindra Finance | 7.00% | 7.35% |
| Sundaram Finance | 7.00% | 7.50% |
| Equitas Small Finance Bank | 7.00% | 7.50% |
| Canara Bank | 6.25% | 6.75% |
| Punjab & Sind Bank | 5.85% | 6.35% |
What should investors look for?
Experts say interest rate should not be the only factor while selecting a fixed deposit.
Investors should also evaluate the issuer's credit profile, premature withdrawal rules, interest payout options, liquidity needs and taxation before investing.
For deposits with NBFCs, checking the company's credit ratings is particularly important, as higher returns may come with relatively higher credit risk compared with bank deposits.
MUST READ: NRE Fixed Deposits: Which banks offer the highest interest rates for NRIs in 2026?
Why FDs still matter
Despite the growing popularity of market-linked investments such as mutual funds and equities, fixed deposits continue to play an important role in financial planning.
They provide assured returns, capital protection and predictable income, making them suitable for conservative investors, retirees and individuals saving for short- to medium-term goals.
With several institutions currently offering interest rates of 7% or more on three-year deposits, investors may find this an opportune time to lock in attractive returns before rates begin to soften.
Fixed deposits (FDs) continue to be one of the most preferred investment options for Indians seeking stable returns with minimal risk. If you're planning to park your money in a three-year FD in 2026, comparing interest rates across banks and finance companies can help maximise your returns.
With interest rates remaining attractive across several small finance banks and non-banking financial companies (NBFCs), investors have multiple options to earn higher returns while keeping their investments relatively secure. Senior citizens, in particular, continue to enjoy additional interest benefits.
Among institutions accepting deposits below ₹2 crore, Shriram Finance currently offers the highest interest rate on a three-year fixed deposit. The company pays 7.50% per annum to general investors and 8.00% per annum to senior citizens.
Among banks, AU Small Finance Bank offers one of the highest rates at 7.10% for general customers and 7.29% for senior citizens.
Small Finance Banks on the top
Small finance banks have consistently offered higher FD rates than many commercial banks to attract retail deposits.
Besides AU Small Finance Bank, Equitas Small Finance Bank offers 7.00% per annum to general depositors and 7.50% to senior citizens for a three-year tenure.
Both banks provide flexible interest payout options and premature withdrawal facilities, making them suitable for investors who may require liquidity before maturity.
NBFCs remain competitive
Finance companies also continue to offer attractive returns on fixed deposits.
Shriram Finance tops the list with 7.50% for general citizens and 8.00% for senior citizens. It also offers flexible payout options, including monthly, quarterly, half-yearly, yearly and cumulative interest payments. Women depositors are eligible for an additional 0.50 percentage point on eligible deposits.
Mahindra Finance offers 7.00% for general investors and 7.35% for senior citizens under its Samruddhi Cumulative Deposit Scheme. The interest is compounded annually.
Similarly, Sundaram Finance offers 7.00% for general customers and 7.50% for senior citizens, along with nomination and premature withdrawal facilities.
MUST READ: SBI vs other public sector banks: Which PSU bank offers the highest FD interest rates in July 2026?
Public Sector Banks offer stability
While public sector banks generally offer lower interest rates than small finance banks and NBFCs, they remain popular because of their strong brand value and extensive branch network.
Canara Bank currently offers 6.25% per annum for general depositors and 6.75% for senior citizens on a three-year FD. Premature withdrawal is permitted, although deposits below ₹2 crore attract a 1% penalty.
DID YOU KNOW: Looking for the best FD? These banks are offering up to 8.10% interest in July 2026
Punjab & Sind Bank offers 5.85% for general investors and 6.35% for senior citizens.
Best 3-Year FD Interest Rates (Deposits below ₹2 crore)
| Bank/Company | General | Senior Citizens |
|---|---|---|
| Shriram Finance | 7.50% | 8.00% |
| AU Small Finance Bank | 7.10% | 7.29% |
| Mahindra Finance | 7.00% | 7.35% |
| Sundaram Finance | 7.00% | 7.50% |
| Equitas Small Finance Bank | 7.00% | 7.50% |
| Canara Bank | 6.25% | 6.75% |
| Punjab & Sind Bank | 5.85% | 6.35% |
What should investors look for?
Experts say interest rate should not be the only factor while selecting a fixed deposit.
Investors should also evaluate the issuer's credit profile, premature withdrawal rules, interest payout options, liquidity needs and taxation before investing.
For deposits with NBFCs, checking the company's credit ratings is particularly important, as higher returns may come with relatively higher credit risk compared with bank deposits.
MUST READ: NRE Fixed Deposits: Which banks offer the highest interest rates for NRIs in 2026?
Why FDs still matter
Despite the growing popularity of market-linked investments such as mutual funds and equities, fixed deposits continue to play an important role in financial planning.
They provide assured returns, capital protection and predictable income, making them suitable for conservative investors, retirees and individuals saving for short- to medium-term goals.
With several institutions currently offering interest rates of 7% or more on three-year deposits, investors may find this an opportune time to lock in attractive returns before rates begin to soften.