How can I prevent my bank from deducting TDS from my interest payout?

If the tax calculated on your total income is NIL, then you can submit form 15G or form 15H (for senior citizens) to your bank. This form proves that you have no tax liability; hence, the bank doesn’t need to deduct tax at source.

What is a lock-in period for fixed deposits?

A lock-in period means you cannot make premature withdrawals on your fixed deposit during the lock-in period, which can be of 1, 2, 3 or even 5 years. Even if you want to withdraw money before the lock-in ends, you will have to pay a penalty for the same. Most tax-saving FD schemes come with a fixed lock-in period of 5 years.

What is the biggest limitation of a fixed deposit?

One of the biggest drawbacks of a fixed deposit is that you get a fixed rate of return on it, i.e., the interest rate remains the same from the date you open your FD account until your FD matures.

How much loan can I avail of against my FD?

This varies with every financial institution. However, banks generally allow you to raise a loan of up to 60% -75% of your deposit value. So, if you have a fixed deposit of Rs. 1 lakh, the loan amount you can get against it is Rs. 60,000 – Rs. 75,000.

How can I maximise my FD returns?

To maximise your returns on FD, pick a deposit tenure with the highest interest rate. With some research, you can easily find the highest returns banks or other financial institutions are offering. Thereafter, you can make ladder investments with different maturity dates to maximise your returns.

What is the sweep-out facility?

If you have an excess balance in your savings account that goes above a set threshold, your bank will automatically sweep out the excess balance and deposit it in your FD account.

What is the sweep-in facility?

Just like sweep out, if the balance in your savings bank account is below the threshold, the bank will transfer the deficit from your fixed deposit to your bank account.

Can I make a partial withdrawal of funds from my fixed deposit?

Most banks allow you to make partial or premature withdrawals on your fixed deposit. However, in such cases, they charge you a small penalty against it.

What is a corporate fixed deposit?

It is a type of fixed deposit scheme offered by non-banking financial companies and corporations. These FDs usually offer a higher interest rate than bank FDs and offer the flexibility of choosing your desired tenure.

Are fixed deposits better than stock investments?

If you are looking for low-risk investment options that offer guaranteed returns, then FD is a better choice. The returns from an FD are not linked to stock market fluctuations. On the other hand, returns from stock investments are heavily dependent on market performance and the investor’s portfolio.

Highest Fixed Deposit (FD) Interest Rate in 2026

Stable Money Team

Author Updated on Apr 24, 2026

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Are you looking for a risk-free way to invest your money? Look no further than a fixed deposit (FD) account. FDs pay higher interest rates than savings accounts and are an excellent choice for those looking for a consistent return on their investment. Whether you’re a first-time investor or a seasoned investor looking for competitive rates, this blog will help you get the best returns on a fixed deposit.

Continue reading to look at the Highest FD interest rates available in India in 2026

Quick Summary:

Fixed deposits (FDs) are a low-risk investment option that offer stable and predictable returns.
Compare rates from small finance banks, private banks, cooperative banks, rural banks, and foreign banks.
Tax-saver FDs provide tax benefits under Section 80C with a 5-year lock-in period.
Senior citizens can earn higher interest rates compared to general investors.

Highest FD Interest Rate 2026

Here are a few banks that give the highest interest on fixed deposits.

Highest Interest Rates on Tax-Saver FDs in 2026

The list below highlights the leading banks offering competitive tax-saving FD rates for both general and senior citizens in 2026.

Bank	General Public	Senior Citizen
Suryoday Small Finance Bank	7.90%	8.10%
DCB Bank	7.15%	7.65%
Slice Small Finance Bank	7.00%	7.25%
IDFC Bank	7.00%	7.50%
Unity Small Finance Bank	6.75%	7.25%
RBL Bank	6.70%	7.20%
Axis Bank	6.45%	7.20%
HDFC Bank	6.40%	6.90%
Bank of Baroda	6.30%	6.90%
Kotak Mahindra Bank	6.25%	6.75%

Highest FD Interest Rates for Co-operative Bank 2026

The list below highlights the co-operative bank offering competitive FD rates for both general and senior citizens in 2026.

Cooperative Bank	1-year	3-year	5-year
Bharat Cooperative Bank	6.90%	6.85%	6.60%
Shamrao Vithal Cooperative Bank	6.85%	6.60%	6.60%
Janata Sahakari Bank	6.50%	6.00%	6.00%
Saraswat Bank	6.40%	6.60%	6.60%
Abhyudaya Bank	6.35%	6.55%	6.15%

Highest Interest Rates for Rural Bank FD 2026

The list below highlights the rural bank offering competitive FD rates for both general and senior citizens in 2026.

Bank	General Public Rates	Senior Citizen Rates
Karnataka Gramin Bank	3.25% - 6.60%	3.75% - 7.10%
Madhya Pradesh Gramin Bank	3% - 7.15%	4.50% - 7.05%
Uttar Pradesh Gramin Bank	3% - 6.50%	3% - 6.50%
Baroda Gujarat Gramin Bank	3% - 6.65%	3.5% - 7.15%
Rajasthan Gramin Bank	3.00% - 6.60%	3.00% - 7.10%

Highest FD Interest Rates for Small Finance Bank 2026

The list below highlights the small finance bank offering competitive FD rates for both general and senior citizens in 2026.

Small Finance Bank	General Public	Senior Citizen
Shivalik Small Finance Bank	7.80%	8.30%
Suryoday Small Finance Bank	7.90%	8.10%
Utkarsh Small Finance Bank	7.50%	8.00%
Slice Small Finance Bank	7.75%	7.75%
Unity Small Finance Bank	7.25%	7.75%

ALSO READ: Best Fixed Deposit Rates

Highest FD Interest Rates for Private Sector Bank 2026

The list below highlights the private sector banks offering highest FD rates for both general and senior citizens in 2026.

Private Sector Bank	General Public	Senior Citizens
Bandhan Bank	7.20%	7.70%
IDFC First Bank	7.00%	7.50%
ICICI Bank	6.50%	7.10%
Axis Bank	6.45%	7.20%
HDFC Bank	6.45%	6.95%

Highest FD Interest Rates for Payment Banks 2026

The list below highlights the payment banks offering competitive FD rates for both general and senior citizens in 2026.

Bank	General Public Rates	Senior Citizen Rates
Paytm Payments Bank	3.50% - 7.75%	3.50% - 7.75%
Airtel Payments Bank	Up to 9.1%	Up to 9.1%
Fino Payments Bank	Up to 6.25%	Up to 6.25%

Highest FD Interest Rates for Foreign Banks in 2026

The list below highlights the foreign banks offering competitive FD rates for both general and senior citizens in 2026.

Foreign Bank	General Public Rates	Senior Citizen Rates
Deutsche Bank	7.00%	7.00%
DCB Bank	6.60%	7.10%
Standard Chartered Bank	6.60%	6.60%
HSBC	5.50%	6.00%
Barclays Bank	5.41%	5.41%

ALSO READ: Latest FD Interest Rates

Factors Affecting Fixed Deposit Interest Rate in India

Fixed deposit interest rates constantly keep changing in India based on RBI’s repo rate announcements. Banks periodically announce their revised rates to remain competitive and at par with the changing economic conditions.

The changes are often announced at the beginning of a new financial year or quarter. Here are some key factors that affect the interest rates for fixed deposit schemes.

Deposit Duration

The first most important factor that affects your interest rate is duration for which you want to make the deposit. In most cases, medium-term deposits of 3-5 years fetch the highest FD interest over long-term deposits of 10 years or short-term deposits of one year. However, it depends on the deposit amount as well.

Deposit Amount

Most banks give you a better return when you deposit a larger amount of money. Especially if your investment amount is above one or two crores, you will get higher returns than you get for less than one crore. However, this varies from bank to bank and so ensure to confirm the deposit rates in advance.

RBI Guidelines

Every action taken by RBI indirectly affects your FD rates. Whenever RBI changes its cash reserve ratio and repo rate. As a result, banks also change their interest rates accordingly which affect all banking products, including fixed deposits.

Inflation and Recession

These are two of the most prominent factors that affect the interest rate on fixed deposit schemes. When inflation hits, banks increase the FD rates to match the inflation rates. Similarly, when the recession hits, RBI reduces the interest rates on the central bank’s reserves, influencing banks to push the funds into the market. This, in return, leads to lower interest in FDs as well.

Other Economic Factors

The entire economic condition of a country plays a very important role in determining the interest rate of fixed deposits and other financial instruments. For example, when the credit demand in the country increases, banks increase the interest on fixed deposits to attract more funds and vice versa.

Age of Depositor

As mentioned, senior and super-senior citizens usually get higher interest rates than the general public. Hence, if you are above 60 years, your interest rate in the same bank for the same amount would be higher than someone who is under 60 years of age.

Taxation on Interest Earned on FD in Bank

If you invest in a tax-saver FD, you can claim a tax exemption of up to Rs. 1.5 lakh under section 80C of the Income Tax Act. However, remember that this tax exemption is available only for the amount you invest and not on the interest income you earn from it.

Your interest income is taxable under the head ‘income from other sources.’ If your interest income from all your accounts with the bank exceeds Rs. 40,000, then the bank shall deduct TDS on the same. If you are a senior citizen, then the threshold limit increases to Rs. 50,000.

Additionally, if you have furnished your PAN card details to the bank, the TDS would be 10% of the interest earned. If you fail to provide your PAN, then the TDS will be 20% of your interest earned.

Taxation on Interest Earned on FD in NBFC

Suppose you earn interest from an FD account opened in a Non-banking financial company (NBFC). In that case, the threshold limit of Rs. 40,000 comes down to Rs. 5000. It means that if you have an interest income accruing from any NBFC exceeding Rs. 5,000, a TDS deduction will be applicable on the same.

The PAN card requirement here stays the same as for banks. If you furnish your PAN, the TDS deduction shall be 10%, or otherwise 20%. If you are an NRI and fail to provide your PAN, the TDS deducted shall be 30% instead of 20%.

Conclusion

Fixed deposits continue to be one of the most reliable investment options for individuals seeking safety, predictable returns, and flexibility. With multiple banks offering competitive FD interest rates in 2026, investors have a wide range of choices across small finance banks, private banks, cooperative banks, and foreign banks.

However, selecting the right FD should not depend only on the highest Fixed Deposit interest rate; factors like tenure, deposit amount, bank credibility, and liquidity needs should also be considered. By carefully comparing available options and aligning them with your financial goals, you can make the most of fixed deposits as a stable and effective tool for wealth preservation and steady income generation.