Fixed Deposit Interest Rates in April 2026: A fixed deposit (FD) is the perfect tool for investors who like to stay away from risky investments like stocks and crypto, which are subject to market risks and fluctuate quite frequently. In contrast, FDs are a bank-backed tool, which provides you with a constant interest rate. There is no possibility of your FD interest rate going down even when markets are not at their best, once you invest your money.
Banks keep revising their FD rates regularly in line with RBI interest rates and the condition of the general economy. The FDs are divided into various tenures, and the fixed deposit rates keep varying depending on the tenure.
While all banks have their own fixed deposits, small finance banks often offer significantly better FD interest rates to their customers. Before you invest in a Fixed Deposit (FD), it is recommended that you compare interest rates across different banks.
Latest FD rates of top 5 Small Finance Banks in India
Small Finance Banks including Jana Small Finance Bank, AU Small Finance Bank and Suryoday Small Finance Bank offer higher interest rates of up to 8.10% on their fixed deposits.
Here are the best FD interest rates of 5 most popular small finance banks in India.
| Name of Bank | Tenure | FD Interest Rate (In %) |
|---|---|---|
| Jana Small Finance Bank | >1 Year to 3 Years | 7.50 |
| AU Small Finance Bank | 30 Months 1 Day to 36 Months | 7.10 |
| Utkarsh Small Finance Bank | 2 Years to up to 3 Years | 7.50 |
| Suryoday Small Finance Bank | 30 Months | 8.10 |
| Ujjivan Small Finance Bank | 24 Months | 7.55 |
Benefits of investing in Small Finance Bank FDs
While investing in fixed deposits have their own great benefits, small finance bank FDs have unique advantages of their own. Small Finance Banks have a special banking licence with the sole purpose of providing banking facilities to underserved sectors. This often makes them a preffered choice among some depositors when it comes to FDs.
Here are some of the advantages of depositing in Small Finance Bank FDs —
- Most small finance banks offer a higher interest rate than traditional banks. They generally provide higher rates of interest as compared to normal commercial banks, ranging between 1-2%. While this may look marginal on a standalone basis, it turns out to be a big amount with FD compounding over the years.
- The DICGC, a division of the RBI that covers all bank deposits up to ₹5 lakh, also extends to deposits made with small financing banks. This helps mitigate risks and depositors can invest up to ₹5 lakh worry-free.
- Though the interest earned on FD is taxable as per the Income Tax Act, 1961, you can save on your tax outgo. Tax-Saving Fixed Deposits offer tax deductions of up to ₹1.5 lakh under Section 80C of the Income Tax Act.
- Like other FDs, small finance bank fixed deposits offer risk-free investments as the interest rates are not related to market fluctuations, which market investtors might face.