Banks That Offer Highest Interest Rates on FDs

Fixed deposits (FDs) are traditional investment avenues that remain popular even with the rise of new investment practices such as mutual funds, alternative investment funds, and equity investments. Experts attribute the increasing significance of FDs to their sufficient liquidity, as they can be handy as an emergency corpus.

Here are the top 10 banks offering the best interest rates on FDs for a tenure of three years:

• Three-year FD at Suryoday Small Finance Bank offers 8.6% interest rate, the best among small finance banks. If a person invests Rs. 1 lakh in Suryoday Bank as an FD, it will grow to Rs. 1.29 lakh in three years.
• AU Small Finance Bank and Equitas Small Finance Bank offer 8% interest on three-year FDs. Among small finance banks, a sum of Rs. 1 lakh invested grows to Rs. 1.29 lakh in three years.
• Deutsche Bank has the best interest rate among foreign banks. For a three-year tenure, Deutsche Bank offers 7.75% interest. This means a sum of Rs. 1 lakh will become Rs. 1.26 lakh in three years.
• DCB Bank offers 7.6% interest on three-year fixed deposits, the highest interest rate among private banks. An investment of Rs. 1 lakh will grow to Rs. 1.25 lakh in three years.
• Bandhan Bank, IDFC First Bank, IndusInd Bank, and Yes Bank offer 7.25% interest on FDs with three-year tenures. An investment of Rs. 1 lakh will grow to Rs. 1.24 lakh in three years.
• Ujjivan Small Finance Bank”s interest rate on three-year FDs is 7.20%. This means a sum of Rs. 1 lakh invested will grow to Rs. 1.24 lakh in three years.

Smaller private banks and small finance banks are also offering higher interest rates to attract new deposits. The Deposit Insurance and Credit Guarantee Corporation, a subsidiary of the central bank, guarantees investments in fixed deposits of up to Rs 5 lakh.

Quarterly compounding of interest is assumed for all FDs.