If you want to secure your hard-earned money while earning good returns, a fixed deposit (FD) is a reliable option. However, when bank interest rates are low, even a small increase or decrease in FD rates can significantly impact your returns. Since FD interest rates are fixed at the time of investment, investors should always monitor the latest FD rates from banks.

Highest Interest Among Small Finance Banks
Among small finance banks, Utkarsh Small Finance Bank offers the highest interest rate of 7.65%. Slice Small Finance Bank and Jana Small Finance Bank offer 7.50% interest on 3-year FDs. Suryoday Small Finance Bank offers 7.25% and AU Small Finance Bank offers 7.10%. FDs up to ₹5 lakh at small finance banks are guaranteed by the Deposit Insurance and Credit Guarantee Corporation (DICGC). Experts recommend that investors invest in these banks only to the extent that falls within this limit, so that their principal and interest are protected in case of any unforeseen circumstances.

Highest Rates at Private Banks
Among private banks, RBL Bank offers 7.20% interest on 3-year FDs. SBM Bank India offers 7.10%, while Bandhan Bank, Yes Bank, and DCB Bank offer 7%. IndusInd Bank offers 6.90%, and ICICI Bank and Axis Bank offer 6.60%. HDFC Bank offers 6.45% interest on 3-year FDs.

Interest Rates at Public Sector Banks
Interest rates at public sector banks range from 6% to 6.60% on 3-year FDs. Among these, Union Bank of India offers the highest interest rate at 6.60%, followed by Bank of Baroda at 6.50%, Punjab National Bank (PNB) at 6.40%, and State Bank of India (SBI) at 6.30%. These rates clearly indicate that while public sector banks offer slightly lower interest rates, investors still prefer them due to their security and reliability.

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