Fixed deposits (FDs) continue to remain a preferred investment option for conservative savers seeking predictable returns and capital protection. While large commercial banks have gradually reduced deposit rates following recent monetary policy changes, Small Finance Banks (SFBs) continue to offer some of the most attractive FD rates in the banking sector.
Currently, Small Finance Banks are offering interest rates ranging from 3.50% to as high as 8.30% per annum for general citizens on select tenures. Senior citizens can earn an additional 0.50% to 0.75% in many cases, pushing effective returns even higher.
Importantly, deposits up to ₹5 lakh per depositor per bank are covered under the Deposit Insurance and Credit Guarantee Corporation (DICGC), providing an additional layer of security to retail investors.
SFB FD rates
Several Small Finance Banks are offering interest rates above 8% on specific tenures.
Suryoday Small Finance Bank currently offers one of the highest rates in the segment, providing 8.10% interest on a 30-month FD for general customers and 8.25% for senior citizens.
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ESAF Small Finance Bank offers 8.00% on a special 501-day deposit, while senior citizens can earn up to 8.50%, making it one of the most rewarding options for retirees.
Jana Small Finance Bank provides 8.00% on deposits with tenures ranging from 375 to 400 days. Senior citizens can earn up to 8.00% on select tenures and 8.00% on deposits of more than two years and up to three years.
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Long-term options
Among larger SFBs, Ujjivan Small Finance Bank offers 7.55% on deposits ranging from 991 days to 60 months. Senior citizens receive an additional 0.50 percentage point.
North East Small Finance Bank offers up to 7.75% on deposits with a tenure of around 18 months, while Utkarsh Small Finance Bank provides 7.50% for deposits between two and three years.
Equitas Small Finance Bank offers up to 7.40% for a special 888-day deposit, while senior citizens can earn 8.00% on the same tenure.
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Other SFBs
AU Small Finance Bank offers rates up to 7.10% on deposits with a tenure of 30 to 36 months. Capital Small Finance Bank provides up to 7.15% on a special 600-day deposit, while Unity Small Finance Bank offers up to 7.25% for one-year deposits for senior citizens.
Most banks offer their highest rates on deposits ranging from one year to three years, indicating a preference for medium-term deposits.
Top Small Finance Bank FD Rates (General Citizens)
Top Small Finance Bank FD Rates (Senior Citizens)
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What investors should consider
While higher FD rates can significantly improve returns, investors should avoid concentrating large sums in a single bank. Since DICGC insurance covers only up to ₹5 lakh per depositor per bank, spreading deposits across multiple institutions can help reduce risk.
Investors should also compare tenure-specific rates, premature withdrawal penalties, and senior citizen benefits before locking in funds.
With interest rates still attractive across the Small Finance Bank segment, savers looking for stable returns may find SFB fixed deposits a compelling alternative to traditional bank deposits, especially for short- to medium-term financial goals.
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Published on: Jun 25, 2026 6:35 AM IST
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