When investing in a 1‑year fixed deposit (FD) in India, which bank is best for fixed deposit for 1 year? Small finance banks (SFBs) currently offer the most attractive interest rates. As of mid-2025, banks like Suryoday Small Finance Bank, Unity Small Finance Bank, and Jana Small Finance Bank provide rates around 7. 50% to 7.71% p.a. for general customers and 7.90% to 8.14% p.a. for senior citizens.
Which Bank Gives Highest Interest on FF for 1 Year?
In comparison, mainstream private and public sector banks such as Kotak Mahindra Bank, Bandhan Bank, RBL Bank, SBI, HDFC, and ICICI offer decent but lower rates, typically in the range of 6.6% to 7.5% p.a. for general customers, with senior citizen rates reaching 7.2% to 7.75%. For example, Kotak Mahindra Bank offers around 6.00 to 6.09% for general citizens and for senior citizens, it is at 6.50% to 6.61%.
Leading SFBs such as Suryoday and Unity pay up to 7.71% on 1-year FDs for general customers, and up to 8.14% p.a. for senior citizens.
Deposits are insured up to Rs. 5 lakh per depositor by DICGC, providing safety similar to regular banks. These banks maintain higher rates even after RBI’s recent repo rate cuts, making them yield leaders in the current environment.
However, for investors who prioritise the reputation, widespread presence, or convenience of PSU/private banks, options like Kotak Mahindra, ICICI, HDFC, SBI, or Bank of Baroda offer stable returns between 6.6% to 7.2%, with complete DICGC insurance and easier nationwide access.
Long-term safety is comparable between SFBs and established banks, but if your deposit exceeds Rs. 5 lakh per bank, consider diversifying across multiple institutions to stay within the insurance limit.
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Which Bank is Best for Fixed Deposit for 1 Year?
priya
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4 months
2025-07-22T20:29:57+00:00 2025-07-22T20:29:59+00:00Comment
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