Highest fixed deposit rates: THESE small finance banks offer FD interest rates up to 8%
Small finance banks in the country are offering fixed deposit interest rates of up to 8.60% in 2025, making them an attractive option for conservative investors seeking higher returns.
In today’s volatile market conditions, fixed deposits (FDs) continue to be one of the safest and most trusted investment options for risk-averse investors.
For many people, especially senior citizens, parking funds in a fixed deposit account with a small finance bank (SFB) ensures stable returns while staying protected from daily market ups and downs.
What are small finance bank fixed deposits?
Small finance bank FDs are fixed deposit schemes offered by specialised banks that primarily serve underserved segments of the economy. Compared to traditional bank fixed deposits, small finance banks often provide higher FD interest rates, making them attractive for savers who want both safety and better returns.
If you’re planning to grow your savings in 2025 according to your financial goals, choosing an SFB with the highest fixed deposit rates can help you earn more without taking unnecessary risks.
Small finance bank FD interest rates 2025
| Bank name | Highest FD rate (%) | 1-year tenure (%) | 3-year tenure (%) | 5-year tenure (%) |
|---|---|---|---|---|
| Unity Small Finance Bank | 8.60 (1001 days) | 7.00 | 8.00 | 8.00 |
| Suryoday Small Finance Bank | 8.40 (>30m – 3y) | 7.90 | 8.40 | 8.00 |
| Utkarsh Small Finance Bank | 8.25 (2y – 3y) | 6.25 | 8.25 | 7.75 |
| Jana Small Finance Bank | 8.20 (5 years) | 7.50 | 7.75 | 8.20 |
| Ujjivan Small Finance Bank | 8.05 (18 months) | 7.90 | 7.20 | 7.20 |
| Equitas Small Finance Bank | 7.80 (888 days) | 7.60 | 7.50 | 7.25 |
| ESAF Small Finance Bank | 7.60 (444 days) | 4.75 | 6.00 | 5.75 |
| AU Small Finance Bank | 7.25 (2y 1d – 3y) | 6.50 | 7.25 | 6.75 |
(Rates as updated on June 18, 2025)
Are FDs in small finance banks risky?
Small finance bank FDs provide higher returns but they still come with slightly higher risk than regular FDs. This is because these banks serve niche borrower segments making them more vulnerable to defaults. Still, fixed deposits of up to ₹5 lakhs are insured by Deposit Insurance and Credit Guarantee Corporation (DICGC) this keeps small investments safe.
Should you opt for small finance banks FDs over traditional banks?
The small finance banks FDs are ideal for investors aspiring to maximise their returns without taking market risks. These FDs offer significantly higher interest rates than traditional banks especially for short to medium tenures. Still, it is important to carefully check the bank's credibility and track record before considering any investments.
Disclaimer: This article is for informational purposes only and does not constitute financial advice or a recommendation. Interest rates are subject to periodic revision by banks. Investors are advised to assess their risk appetite, refer to the official websites of banks, conduct due diligence on the institution, and consult a financial advisor before making any investment decisions.
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