9-8% interest on 1 yr FD: Best fixed deposit rates for investors right now

Small Finance Banks like Unity Small Finance Bank and NorthEast Small Finance Bank offer the highest FD rates, particularly in the 1-year to 3-year tenures.

Fixed Deposits (FDs) continue to be a popular and safe investment option for many Indians looking to park their money and earn steady returns. With interest rates on the rise, investors are keen to find the best offers that can maximize their returns. Here’s a look at the top FD interest rates across different banks as of December 2024, and how you can make the most of them.

 

Small Finance Banks lead the pack

Small finance banks are currently offering some of the highest interest rates on fixed deposits. Among them, Unity Small Finance Bank and NorthEast Small Finance Bank stand out, both offering 9.00% p.a. for deposits in the range of 1 to 3 years, which is the highest rate available in the market. These banks also offer competitive rates for other tenures, making them an attractive option for short- to medium-term investors.

 

• Unity Small Finance Bank offers an outstanding 9.00% interest rate on fixed deposits with a tenure ranging from 1 to 3 years.
• NorthEast Small Finance Bank also provides 9.00% for FDs ranging from 546 days to 1111 days, offering investors attractive returns for medium-term investments.
• Jana Small Finance Bank offers competitive returns of 8.25% for 1 to 3-year deposits.
• Suryoday Small Finance Bank offers 8.60% for FDs above 2 years to 3 years, and 8.25% for 5-year FDs, ensuring that medium-term and long-term investors also benefit from high interest rates.

 

Private Sector Banks: Competitive but lower returns

Private sector banks, while offering lower rates compared to small finance banks, still provide competitive returns. For example, Bandhan Bank offers an attractive 8.05% for 1-year FDs, while RBL Bank provides 8.00% for a 500-day FD. Other private banks like IDFC First Bank (with 7.90% for 400-500 days) and HDFC Bank (with 7.40% for a 4-year, 7-month FD) also offer reasonable rates for those who prefer the reliability of well-established institutions.

 

While these rates are slightly lower, the security and ease of doing business with larger private-sector banks make them attractive to many investors.

 

• Bandhan Bank is a leader among private banks, offering 8.05% interest for 1-year fixed deposits. 
• RBL Bank offers 8.00% on FDs with a tenure of 500 days, ensuring that medium-term investors also get good returns.
• ICICI Bank and Axis Bank are offering attractive rates of 7.25% to 7.50% for FDs ranging from 15 months to 2 years, making them reliable options for conservative investors.
• HDFC Bank, one of the most popular private-sector banks, offers 7.40% for long-term deposits of 4 years and 7 months, which is competitive in its category.

 

These private banks offer slightly lower rates compared to small finance banks but are widely recognized for their stability and strong market presence, making them an attractive option for those who prefer well-established institutions. 

 

Public Sector Banks: Stable but modest returns

Public sector banks typically offer more conservative interest rates compared to their private-sector counterparts, but they continue to be a reliable choice for conservative investors. Among the top public-sector banks, Bank of Baroda offers 7.30% for a 400-day FD, while Canara Bank offers 7.40% for a 3- to 5-year FD, making them solid choices for those looking to lock in returns with stability.

 

• Canara Bank offers 7.40% for FDs with a tenure of 3 years to less than 5 years, making it one of the best rates in the public sector category.
• Bank of Baroda offers 7.30% for FDs with a tenure of 400 days, which is ideal for medium-term investors looking for good returns with minimal risk.
• Bank of Maharashtra and Union Bank of India both provide 7.30% and 7.25% respectively, offering stable returns for fixed deposit investors.
• State Bank of India (SBI), the country’s largest public sector bank, offers 7.25% for FDs with a tenure of 444 days.

 

Public sector banks, with their longstanding reputation, remain a go-to choice for investors who prioritize safety and are not as concerned about higher interest rates.

 

• Foreign banks also have a presence in the FD market, offering competitive rates. Deutsche Bank, for example, offers 8.00% for a 1-year to 3-year FD, which is on par with the best small finance banks. However, foreign banks often have additional requirements, such as higher minimum deposit amounts, so they may not be the best option for every investor.
• HSBC offers 7.50% for FDs of 601-699 days, while Standard Chartered Bank provides 7.50% for 1 year to 375 days.

 

Key Takeaways:

• Small Finance Banks continue to dominate the market with rates as high as 9.00% for select tenures, making them ideal for investors seeking high returns.
• Private Sector Banks such as Bandhan Bank and IDFC First Bank provide competitive rates, with 8.05% being the highest among them for 1-year FDs.
• Public Sector Banks like Bank of Baroda and Canara Bank offer reliable returns, with rates in the range of 7.25% to 7.40%, ideal for more conservative investors.
• Foreign Banks such as Deutsche Bank also offer attractive returns, but they may come with additional requirements and restrictions.

 

For investors planning to invest in Fixed Deposits in 2025, the key lies in finding the right balance between higher returns and the safety of the bank.