FD Interest Rates Peak at 8.5%: Updated Comparison for September 2025
Fixed Deposits remain India’s most trusted savings option for stable and guaranteed returns. With FD rates peaking at 8.5% this September, smart savers and traders are keen to know which banks and tenures offer the best deals. This easy guide compares the highest FD interest rates, explains the difference between bank types, and gives quick tips for choosing the right FD strategy.
Table of Contents
FD Rate Trends in September 2025
September 2025 marks a high point for Indian FD interest rates, with select small finance and private banks offering rates between 7.0% and 8.5% — a level not seen in recent years. Savvy investors are flocking to short- and medium-term FDs, especially in newer small finance banks, while public sector banks continue to provide reliability with modest, stable rates[1][8][9].
- Small Finance Banks offer the highest FD rates but carry slightly higher risk.
- Top private banks compete with attractive offers for longer tenures (2-5 years).
- All bank FDs are insured up to ₹5 lakh under DICGC for additional safety.
- Investing with multiple banks can help balance returns and security.
Quick Rate Highlights (Infographics)
Peak Rate
(General)
(General)
8.50%
Offered by Slice Small Finance Bank for 18 months
Top Private Bank Rate
7.50%
SBM Bank India for 5-year FD
Top PSU Bank Rate
6.75%
Central Bank of India on select tenures
Senior Citizen Special
8.67%
Suryoday SFB for 5 years (Senior Citizens)
Best FD Rates by Bank Type
Small Finance Banks (SFBs)
SFBs lead in offering attractive rates to boost financial inclusion. In September 2025, the standout offers include:
- Slice Small Finance Bank: 8.5% for 18-month FD
- Suryoday SFB: 8.4% for 5-year FD | 8.67% for seniors[3][9][8]
- Utkarsh, Jana, ESAF, Equitas: Range from 7.9% to 8.25%
Private Banks
Private sector lenders offer strong stability with decent returns. In September 2025:
- SBM Bank India: 7.5% (5-year FD)
- Jana Small Finance Bank: 8% (3-5 years)
- YES Bank, RBL, Bandhan, DCB: All top 7.7% (2–5 years, special tenures)
- HDFC, ICICI, Axis: Range from 7.1% to 7.35% depending on tenure[8][5][11][16]
Public Sector Banks (PSBs)
Government banks remain a favorite for risk-averse investors, though with more moderate rates:
- Central Bank of India, Indian Overseas, Indian Bank, Punjab & Sindh, SBI (special schemes): 6.60% – 6.75%
- Bank of Maharashtra: 6.70%
- State Bank of India: 6.60% (special 444-day FD)[1][6][13]
Bank-wise FD Rates Table (September 2025)
| Bank/Institution | Peak Rate (General) | Senior Citizen Rate | Special Tenure |
|---|---|---|---|
| Slice Small Finance Bank | 8.50% | NA | 18 months |
| Suryoday Small Finance Bank | 8.40% | 8.67% | 5 years |
| Utkarsh Small Finance Bank | 8.15% | NA | 2–3 years |
| Jana Small Finance Bank | 8.00% | NA | 3–5 years |
| Equitas Small Finance Bank | 7.90% | NA | 888 days |
| SBM Bank India | 7.50% | NA | 5 years |
| RBL Bank | 7.70% | NA | 2–3 years |
| YES Bank | 7.75% | NA | 3–5 years |
| Central Bank of India | 6.75% | NA | Special |
| State Bank of India | 6.60% | NA | 444 days |
| ICICI/HDFC/Axis | 7.10% – 7.35% | NA | 1–5 years |
FD FAQs for Investors (2025)
Are small finance bank FDs safe?
FDs in SFBs are insured up to ₹5 lakh by DICGC, same as other scheduled banks. However, check the bank’s reputation and diversify across multiple institutions for higher safety[9].
When are the best times to book FDs?
The best time is when rates are peaking, as in September 2025. Watch RBI policy news; rate increases often follow repo rate hikes[1].
Can I break my FD before maturity?
Yes, but banks usually impose a penalty, reducing your effective return. Compare policies before investing[16].
Is interest income from FDs taxable?
Yes, interest is added to your taxable income and taxed per your slab. TDS applies above ₹40,000/₹50,000 (senior citizens)[6].
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