FD rates up to 8.50%: Suryoday SFB leads, but experts say don’t chase the highest rate blindly

Fixed deposit (FD) rates remain attractive across banks and tenures, with small finance banks (SFBs) continuing to offer some of the highest returns to depositors. Suryoday Small Finance Bank offers up to 8.25% for general citizens and 8.50% for senior citizens, making it one of the most competitive options in the current rate landscape.

However, investors should not select an FD purely on the basis of the highest advertised interest rate, according to Saurabh Jain, Co-founder and CEO, Stable Money.

Suryoday offers up to 8.50% for senior citizens

Among SFBs, Suryoday currently leads the rate table, with general citizens eligible for up to 8.25% and senior citizens up to 8.50%.

Jain said FD rates remain competitive across banks and tenures, but cautioned that “the highest rate is not always the best choice.”

He said investors should evaluate the tenure, bank offering the rate and how the FD fits into their overall savings goals before committing their money.

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Don't focus only on the headline rate

The difference between FD rates can appear significant, but the interest rate needs to be assessed alongside the duration for which the money will be locked in.

For investors who may need access to their money, choosing a longer-tenure FD solely because it offers a higher return could reduce liquidity. Jain therefore recommends looking at the overall portfolio rather than chasing the best rate available at a particular point in time.

“Spreading deposits across banks and tenures can help balance returns, safety and liquidity,” he said.

Diversification can help manage FD risk

Jain also highlighted the importance of deposit insurance when investors compare banks. DICGC deposit insurance covers up to Rs 5 lakh per depositor per bank, making the distribution of deposits across banks an important consideration for those with larger savings.

Jain suggested that investors can also “book FDs in stages” rather than investing their entire surplus at once. This approach can provide flexibility and allow investors to take advantage of prevailing rates as deposits mature.

For savers, the current FD market therefore offers attractive rates, particularly among SFBs, but the decision should ultimately consider returns, safety, tenure and liquidity, rather than simply selecting the bank offering the highest number.

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