Fixed deposits continue to attract savers who want predictable interest without directly exposing their money to stock-market fluctuations. While large public and private-sector banks remain popular choices, several small finance banks are offering comparatively higher interest rates on selected FD tenures.
According to the rates cited in the latest comparison, Suryoday Small Finance Bank is offering 8.25% per annum on a five-year fixed deposit, while Jana Small Finance Bank is offering 8% on a three-year tenure.
At the cited 8.25% rate, a ₹5 lakh cumulative fixed deposit could grow to approximately ₹7.52 lakh over five years, depending on the applicable compounding method and deposit terms.
However, customers should verify the latest rate directly with the bank before investing because FD rates can be revised.
Suryoday Small Finance Bank Offers 8.25% on 5-Year FD
Among the small finance banks included in the comparison, Suryoday Small Finance Bank offers one of the highest cited rates.
Its five-year FD carries an interest rate of 8.25% per annum for the applicable depositor category, according to the reported rates.
For a one-year fixed deposit, the cited rate is 7.25% per annum.
The difference demonstrates why depositors should compare tenures instead of looking only at the bank's headline maximum FD rate. A bank's highest advertised rate may be available only for a particular maturity period.
₹5 Lakh Could Become Around ₹7.52 Lakh
Consider an investor placing ₹5 lakh in a cumulative five-year FD at an annual rate of 8.25%.
According to the calculation cited in the source, the maturity value would be approximately:
Initial deposit: ₹5,00,000
Estimated maturity value: ₹7,52,132
Estimated interest earned: ₹2,52,132
The maturity amount assumes the applicable compounding structure used for the calculation. Actual maturity proceeds can differ based on compounding frequency, deposit conditions and taxation.
It is also important to distinguish the maturity value from the amount an investor ultimately retains after considering applicable income tax.
Jana Small Finance Bank Offers 8% on 3-Year FD
Jana Small Finance Bank is another institution offering a comparatively high rate in the reported comparison.
Its three-year fixed deposit carries a cited annual interest rate of 8%.
For investors who do not want to lock their money away for five years, a shorter tenure offering a competitive rate may be worth comparing with longer-duration deposits.
However, interest rate alone should not determine the choice. Premature-withdrawal conditions, liquidity requirements and the depositor's financial goals also matter.
FD Rates Offered by Other Small Finance Banks
Several other small finance banks also offer competitive rates on selected maturities.
Based on the figures provided in the source, the comparison is:
| Bank | FD Tenure | Interest Rate |
|---|---|---|
| Suryoday Small Finance Bank | 5 Years | 8.25% |
| Suryoday Small Finance Bank | 1 Year | 7.25% |
| Jana Small Finance Bank | 3 Years | 8.00% |
| ESAF Small Finance Bank | 1 Year | 6.00% |
| ESAF Small Finance Bank | 3 Years | 6.00% |
| Utkarsh Small Finance Bank | 3 Years | 7.50% |
| Ujjivan Small Finance Bank | 1 Year | 7.25% |
| Ujjivan Small Finance Bank | 3 Years | 7.25% |
| Shivalik Small Finance Bank | 3 Years | 7.50% |
These are the rates cited in the source as of September 22, 2026. Depositors should confirm current rates and eligibility directly with the respective bank before opening an FD.
Senior Citizens May Receive Additional Interest
Many banks offer senior citizens an additional interest rate over the rate available to regular depositors.
The source notes that several small finance banks provide an additional 0.50 percentage point to eligible senior citizens.
However, the additional rate and eligibility conditions can differ by bank and tenure.
Therefore, senior citizens should compare the effective rate available specifically to them rather than relying on the standard depositor rate.
Bank of India Green Deposit Offers 6.85%
Investors who prefer a public-sector bank can also compare special deposit products.
According to the cited rates, Bank of India offers 6.85% per annum on a 999-day deposit under its Green Deposit scheme for the applicable regular depositor category.
The reported rate increases to 7.35% for senior citizens and 7.50% for eligible super senior citizens.
For this comparison, people aged 60 years and above fall under the senior-citizen category, while those aged 80 years and above are treated as super senior citizens under the cited product conditions.
How Much Could ₹5 Lakh Earn in BOI's 999-Day Deposit?
The source provides another illustration using a ₹5 lakh deposit.
If ₹5 lakh is placed in the Bank of India Green Deposit for 999 days at the cited 6.85% annual interest rate, the reported maturity value is approximately ₹7,02,193.
The actual maturity proceeds should be checked using the bank's current FD calculator because the result depends on the applicable interest rate, tenure and compounding rules.
Are Small Finance Bank FDs Safe?
Fixed deposits do not fluctuate with the stock market in the same manner as equity investments, but depositors should avoid assuming that every FD is entirely without risk.
One important protection available to eligible bank depositors in India is deposit insurance.
Under the Deposit Insurance and Credit Guarantee Corporation framework, eligible deposits—including principal and interest—are insured up to ₹5 lakh per depositor per bank, subject to applicable rules.
The ₹5 lakh limit is calculated across eligible deposits held by a depositor in the same right and capacity at a bank, rather than providing a separate ₹5 lakh insurance limit for every individual FD.
This becomes especially relevant when placing large deposits with any bank.
Remember That FD Interest Is Taxable
A high headline interest rate does not necessarily equal the investor's post-tax return.
Interest earned from bank fixed deposits is generally taxable according to the depositor's applicable income-tax rules. TDS provisions may also apply when the relevant conditions and thresholds are met.
Consequently, investors should compare FD returns on an after-tax basis when evaluating them against other financial products.
Compare More Than Just the Highest Interest Rate
An 8.25% FD may appear more attractive than one offering 6.85%, but interest rate is only one part of the decision.
Investors should also examine the tenure, premature-withdrawal penalty, compounding frequency, senior-citizen benefit, liquidity needs, tax treatment and deposit-insurance limits.
The examples above show that a ₹5 lakh investment could potentially grow to around ₹7.52 lakh over five years at the cited 8.25% rate. But the best deposit structure will depend on when the money is needed and the investor's broader financial circumstances.
Disclaimer: The interest rates and maturity examples above are based on the figures cited in the source and can change. Check the latest rates, terms and maturity calculation with the respective bank before investing. This article is for general information and does not constitute financial or investment advice.
Recheck and correct the maturity calculationsClarify the date and source context
