FD at PSU banks vs private banks vs SFBs – How much can ₹5 lakh earn in 5 years? Check best rates here

For medium-term investing, say for five years, fixed deposits remain a preferred choice for many Indians. Their biggest advantage is predictability — since the interest rate is locked in at the time of investment, investors know exactly how much they will receive at maturity.

When parking money in fixed deposits, most investors look for banks offering the highest interest rates. While many prefer the safety and trust of PSU banks, others go for private banks and small finance banks (SFBs). Even though they are slightly riskier, they often provide higher FD returns than their larger peers.

Based on Paisabazaar data, we collated a list of the highest-paying fixed deposit rates – PSU banks, private banks and small finance banks — and analysed how much your ₹5 lakh investment can grow over five years.

Which private sector bank offers the highest FD rate?

Among major private sector lenders, DCB Bank currently offers the highest 5-year FD interest rate for general citizens at 7.25%. IDFC FIRST Bank follows with a 7.15% rate, while YES BANK, RBL Bank and Tamilnad Mercantile Bank are offering between 6.70% and 6.75% for similar tenures.

Which PSU bank offers the highest FD rate?

Among PSU banks, Bank of Baroda is offering the highest 5-year FD rate at 6.30%. Meanwhile, Canara Bank and State Bank of India (SBI) are offering 6.25% and 6.05% interest rates, respectively, on their 5-year FDs.

Which SFB bank offers the highest FD rates?

Suryoday Small Finance Bank offers the highest 5-year FD interest rate at 7.90% among all the SFBs. Followed by Jana Small Finance Bank at 7.77% and Ujjivan Small Finance Bank at 7.20%.