FD interest rates up to 8.10%: From tax-saving to senior citizen FDs, here's how to choose the right fixed deposit

Fixed deposits (FDs) continue to be one of the most preferred investment options for conservative investors, thanks to guaranteed returns and capital protection. With banks and non-banking financial companies (NBFCs) currently offering interest rates of up to 8.10% per annum, choosing the right type of FD can be just as important as selecting the highest interest rate.

An FD allows investors to deposit a lump sum for a fixed tenure ranging from 7 days to 10 years. The interest rate is locked in at the time of investment and can either be paid periodically or along with the principal at maturity. Since returns are fixed and not linked to market movements, FDs remain a popular choice for emergency funds, retirement savings and short-term financial goals.

Where are the highest FD rates?

Small finance banks continue to offer some of the highest FD interest rates in the market. Among mainstream private banks, a few lenders are offering rates above 7%, while public sector banks generally offer lower returns.

Institution	Regular FD Rate	Senior Citizen Rate
Suryoday Small Finance Bank	8.10%	8.25%
Shivalik Small Finance Bank	7.80%	8.30%
IDFC FIRST Bank	7.25%	7.50%
YES Bank	7.00%	7.75%
RBL Bank	7.20%	7.70%
SBI	6.45%	7.05%
HDFC Bank	6.50%	7.00%
ICICI Bank	6.50%	7.10%

Rates as of July 23, 2026.

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Different types of fixed deposits

Banks and financial institutions offer several FD variants to suit different investment needs.

Type of FD	Who is it suitable for?	Key Features
Standard FD	Most investors	Fixed interest rate for a chosen tenure
Tax-saving FD	Individuals and HUFs	Eligible for tax deduction up to Rs 1.5 lakh under Section 80C; 5-year lock-in
Senior Citizen FD	Investors aged 60 years and above	Usually offers 50 basis points higher interest than regular FDs
Floating Rate FD	Investors expecting interest rate changes	Returns linked to benchmark rates such as the RBI repo rate
Flexi FD	Those seeking liquidity	Linked to savings account; allows partial withdrawal while the remaining amount continues earning FD interest
Corporate FD	Investors seeking higher returns	Offered by NBFCs and HFCs; generally offers higher rates than bank FDs
Cumulative FD	Long-term investors	Interest is compounded and paid at maturity
Non-cumulative FD	Regular income seekers	Interest paid monthly, quarterly, half-yearly or annually
Callable FD	Investors needing flexibility	Premature withdrawal allowed, usually with a penalty
Non-callable FD	Investors who can stay invested till maturity	Higher interest rates but no premature withdrawal

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What should investors consider?

While the headline interest rate is important, investors should also consider the investment tenure, liquidity needs, tax implications and the financial strength of the institution. For example, those looking to save tax may prefer a tax-saving FD despite the five-year lock-in, while retirees seeking regular income may find non-cumulative or senior citizen FDs more suitable.

Investors who may need access to funds before maturity could consider callable or flexi FDs, whereas those who can remain invested throughout the tenure may benefit from the relatively higher returns offered by non-callable FDs. Similarly, cumulative FDs are generally preferred by investors looking to maximise returns through compounding, while non-cumulative deposits are designed for those who want periodic income.

Although small finance banks and NBFCs often offer higher interest rates than large commercial banks, investors should compare products carefully and ensure they are comfortable with the institution before investing. Selecting an FD that matches your financial goal, rather than simply opting for the highest advertised rate, can help balance returns, liquidity and safety.