Fixed deposits (FDs) continue to attract investors seeking stability, but the rate landscape in April–May 2026 shows a widening gap between traditional bank FDs and higher-yielding NBFC deposits.

Across major banks, FD rates for general customers currently range between 2.75% and 7.40% per annum, depending on tenure. For the widely preferred 1–3 year tenure, large lenders such as SBI, HDFC Bank, ICICI Bank, and Axis Bank offer returns in the 6.25% to 6.50% range. Private sector players like IDFC FIRST Bank, Bandhan Bank, and RBL Bank provide relatively higher rates, going up to 7.25%–7.40%, with senior citizens earning up to 7.75%–7.90%.

For longer tenures of 5–10 years, most banks offer slightly lower returns of 6.00% to 6.75%, reflecting a stable but range-bound interest rate environment. While bank FDs remain popular due to capital safety and DICGC insurance cover of up to ₹5 lakh, investors seeking higher yields are increasingly exploring NBFC deposits.

Bajaj Finance FD rates

Among NBFCs, Bajaj Finance has recently revised its FD rates upward by up to 45 basis points, effective May 1. The company now offers 7.40% per annum for 31–60 month deposits to general investors and 7.75% for senior citizens, positioning its products among the higher-yielding options in the long-term segment. 

Under the revised structure, returns stand at 6.60% for 12–17 months, 6.85% for 18–30 months, and 7.40% for 31–60 months for general customers. Senior citizens earn slightly higher rates of 6.95%, 7.20%, and 7.75% across these tenures.
The company has also introduced minor rate hikes across select tenures and restructured maturity slabs to improve flexibility.

Investors can choose between cumulative and non-cumulative payout options, including monthly, quarterly, half-yearly, and annual interest payouts. Additionally, a loan-against-FD facility allows liquidity without premature withdrawal.

Bajaj Finance FDs carry AAA/Stable ratings from CRISIL and ICRA, indicating a high level of safety. As of March 2026, the company reported a customer base of over 119 million and assets under management of approximately ₹5.1 lakh crore. 

NBFC FDs

NBFC FDs currently offer interest rates in the range of 6.15% to 8.50%, making them attractive for yield-seeking investors. Companies such as Muthoot Capital Services offer up to 8.5%, while Shriram Finance and Sundaram Finance provide returns between 7.5% and 8%.

The higher rates are largely due to NBFCs’ reliance on public deposits to fund lending activities across sectors such as housing finance, vehicle loans, and MSME credit.

However, unlike bank FDs, NBFC deposits are not covered by DICGC insurance, making credit risk assessment critical. Investors are advised to focus on highly rated issuers to balance risk and return.

Bank FDs

Bank fixed deposits offer lower but more stable returns, typically ranging between 2.75% and 7.40%, with the added advantage of capital safety and DICGC insurance up to ₹5 lakh. However, small finance banks (SFBs) are leading the FD rate cycle in April 2026, offering significantly higher returns of up to 8.10% for select tenures. 

Small finance banks (SFBs) are currently offering some of the highest FD rates in the market, with returns going up to 8.10% for select tenures. They typically provide better yields than traditional banks, especially in the 1.5 to 3-year range. However, investors should balance these higher returns with considerations around bank strength and deposit safety.

Players like Suryoday, ESAF, and Jana SFB are offering some of the most competitive rates, especially in the 1.5 to 3-year segment. These higher yields are often linked to special tenures. While SFBs enhance return potential, investors should balance yields with safety, tenure strategy, and overall risk considerations. 

What should investors consider?

The current FD landscape highlights a clear trade-off: bank deposits offer safety and moderate returns, while NBFC FDs provide higher yields with slightly elevated risk. Financial experts recommend diversification — allocating funds across banks and top-rated NBFCs — to optimise returns without compromising on capital protection.

As interest rates stabilise, FDs continue to play a crucial role in portfolios, particularly for conservative investors. However, careful selection of tenure, institution, and credit quality remains essential to maximise returns in the evolving rate cycle.

Published on: May 1, 2026 6:35 AM IST