Fixed Deposits (FDs) remain one of the safest and most reliable investment options for Indian investors in 2025. With rising interest rates and banks competing to attract more deposits, many financial institutions are now offering attractive FD rates, some going as high as 9%. If you’re a conservative investor looking for stable returns without market risks, these high-yield bank FD schemes could be perfect for your portfolio.
Below, we take a detailed look at the top 10 fixed deposit schemes in 2025 that are offering the highest interest rates, along with other important details like tenure, premature withdrawal, and special features that make each one stand out.
Why Choose FDs in 2025
In 2025, fixed deposits have regained popularity among investors due to increasing repo rates and economic uncertainty. While mutual funds and equities may offer higher long-term returns, FDs offer guaranteed capital protection and predictable interest earnings, making them ideal for senior citizens, risk-averse investors, and those with short- to medium-term financial goals. In addition, several small finance banks and NBFCs are now offering higher-than-average interest rates, beating traditional banks.
Interest Rates Have Gone Up
Due to inflationary pressures and the RBI’s stance on tightening liquidity, many banks have revised their FD rates upwards. As a result, several banks now offer interest rates between 7.5% and 9% depending on the deposit tenure and age of the investor. Senior citizens often get an additional 0.25% to 0.75% over and above regular rates. These returns are significantly better than what savings accounts or liquid funds are offering at the moment.
Top 10 FD Rates 2025
As of October 2025, the following banks and financial institutions offer the highest interest rates on fixed deposits. These rates apply to general citizens; senior citizens may get even higher.
Unity Small Finance Bank is leading the charts with up to 9.00% p.a. on selected tenures. It’s an RBI-licensed institution with high FD ratings, making it a preferred option for short-term investors.
Equitas Small Finance Bank is offering 8.75% p.a. for 888-day fixed deposits. The bank has consistently ranked among the top for offering competitive FD returns with flexible tenure options.
Suryoday Small Finance Bank has a high-interest offering of 8.85% p.a., especially for tenures around 2 to 3 years. The bank also provides convenient digital onboarding for FD investments.
Jana Small Finance Bank offers an FD interest rate of up to 8.50% p.a. This is especially popular among senior citizens looking to park their retirement corpus safely.
AU Small Finance Bank provides up to 8.25% p.a. interest for deposits between 12 to 24 months. AU Bank is well-known for its strong digital banking infrastructure and customer service.
DCB Bank is providing 7.90% p.a. for longer tenure deposits of up to 36 months. Their FDs are available both online and at physical branches with minimal documentation.
IndusInd Bank is offering 7.75% p.a. for 1–2-year FDs. The bank is a trusted name with a long history and robust banking infrastructure across India.
IDFC FIRST Bank has an interest rate of 7.85% p.a. for tenures starting from 1 year onwards. Their online FD booking is seamless and popular with salaried investors.
Yes Bank is offering FDs at 8.00% p.a., and while it had past credibility issues, it is now under RBI monitoring and is considered a reasonable risk for short- to medium-term investors.
HDFC Bank and ICICI Bank, though more conservative, are offering 7.50% to 7.75% p.a. for senior citizens and 7.25% for regular customers. Their stability and reputation make them a go-to option for large deposits.
FDs for Senior Citizens
In 2025, senior citizens enjoy the best FD rates, with most banks offering them an additional interest of 0.50% to 0.75% p.a. over regular customers. These special rates apply to standard tenures between 12 months and 5 years. Additionally, schemes like the Senior Citizen Savings Scheme (SCSS) and Pradhan Mantri Vaya Vandana Yojana (PMVVY) continue to offer higher returns with added tax benefits under Section 80C.
Tax Implications on FD Returns
Interest earned on FDs is fully taxable under the income tax slab applicable to the investor. Banks deduct TDS (Tax Deducted at Source) at 10% if the interest income exceeds ₹40,000 in a financial year (₹50,000 for senior citizens). To reduce tax outgo, investors often split their deposits across financial years or use the 5-year tax-saving FD option, which qualifies for deductions under Section 80C.
Things to Consider Before Investing
While high-interest rates are attractive, investors should always evaluate the credit rating of the bank or NBFC offering the FD. It’s advisable to stick to RBI-regulated entities and avoid unknown fintech platforms. Also, confirm the rules regarding premature withdrawals, reinvestment options, auto-renewals, and compounding frequency, which significantly impact the effective returns on your investment.
Digital FD Investments in 2025
In 2025, investing in FDs has become more convenient than ever. Most banks now allow customers to book FDs online through their mobile apps or net banking platforms. Some fintech apps also aggregate FD schemes from multiple banks, allowing you to compare interest rates, tenures, and features in one place before making a decision.
Final Thoughts on FD Schemes
Fixed deposits continue to be a smart choice for capital protection and steady income in 2025. With rates touching 9%, savvy investors can now lock in high returns with minimal risk. However, it’s crucial to balance risk and reward by choosing reputable banks, understanding tax implications, and aligning your FD investment with your financial goals.
Disclaimer: This article is for general informational purposes only and does not constitute financial advice. Always consult a qualified advisor before making investment decisions.