Summary:
Bank FD interest rates vary by lender and deposit tenure, with selected banks offering up to 7.5% annually in October 2026. Compare rates across 16 banks while considering taxation, premature withdrawal rules, maturity amounts and DICGC deposit insurance.
FDs continue to be a popular investment avenue for Indian households looking for capital protection and predictable returns. However, interest rates vary widely across banks and deposit tenures. As of October 26, 2026, several private sector banks were offering interest rates of up to 7.5% per annum to regular depositors. In contrast, some public sector banks were providing relatively lower returns.
Bank FD Rates: Which Bank Offers Higher Returns?
DCB Bank (NSE: DCBBANK | BSE: 532772) offers some of the highest FD interest rates among the banks compared, with rates going up to 7.5% for certain deposit tenures.
RBL Bank (NSE: RBLBANK | BSE: 540065) offers up to 7% on select tenures, while YES Bank (NSE: YESBANK | BSE: 532648) provides up to 7.25% on deposits with tenures between one and two years.
Tamilnad Mercantile Bank and Dhanlaxmi Bank also offer competitive rates, with maximum interest rates of 7.25% for certain deposit periods.
HDFC Bank and ICICI Bank are among the larger private sector lenders offering rates of up to 6.5% and 6.6%, respectively, for specific deposit tenures.
Comparison of Bank FD Interest Rates – October 2026
The table below compares the annual interest rates offered by 16 banks across different deposit periods.
Fixed Deposit Interest Rates for Deposits Up to ₹1 Crore (Per Annum)
| Bank | 6 Months to 1 Year | 1 to 2 Years | 2 to 3 Years | 3 to 5 Years | 5 Years & Above |
| DCB Bank | 6.00-6.50 | 6.90-7.10 | 6.90-7.50 | 7.00-7.10 | 7.00-7.50 |
| Jammu & Kashmir Bank | 5.50-6.00 | 6.55-6.65 | 6.70-6.75 | 6.70 | 6.75 |
| YES Bank | 4.75-6.50 | 6.65-7.25 | 6.90-7.00 | 7.00 | 6.75 |
| RBL Bank | 4.75-6.00 | 6.90-7.00 | 7.00 | 7.00 | 6.70 |
| Tamilnad Mercantile Bank | 6.30-6.50 | 6.60-7.25 | 7.00 | 6.70 | 6.70 |
| ICICI Bank | 4.50-5.00 | 6.25-6.30 | 6.30-6.55 | 6.55-6.60 | 6.60 |
| IndusInd Bank | 5.75-6.25 | 6.75-6.90 | 7.00 | 6.65-7.00 | 6.50-6.65 |
| Dhanlaxmi Bank | 5.50 | 6.25-7.10 | 6.25-6.50 | 6.50-7.25 | 6.50-6.60 |
| Axis Bank | 5.50-5.75 | 6.25-6.50 | 6.50 | 6.50 | 6.50 |
| Federal Bank | 4.50-6.00 | 6.25-6.65 | 6.50-6.55 | 6.40-6.70 | 6.40 |
| City Union Bank | 5.75-6.25 | 6.65-7.30 | 7.30 | 6.55-7.30 | 6.25-6.55 |
| Karur Vysya Bank | 6.00-7.00 | 6.55-7.20 | 6.55 | 6.55 | 6.25-6.55 |
| Kotak Mahindra Bank | 5.00-6.00 | 6.35-6.55 | 6.65 | 6.40 | 6.25 |
| Canara Bank | 5.25-5.50 | 6.25-6.60 | 6.25 | 6.25 | 6.25 |
| HDFC Bank | 4.25-5.75 | 6.25-6.45 | 6.45 | 6.40-6.50 | 6.15-6.40 |
| Indian Overseas Bank | 4.50-5.50 | 6.40-6.60 | 6.40 | 6.10 | 6.10 |
Source: BankBazaar.com (as per the newspaper comparison). Rates are for regular depositors and are based on the October 26, 2026 snapshot. These are tenure-specific ranges and may not apply to every deposit duration. Depositors should independently verify the applicable interest rate with their bank before investing.
Why Do Bank FD Interest Rates Vary So Much?
Banks revise their fixed deposit rates based on prevailing interest rates, funding costs, credit demand and liquidity requirements.
Larger banks may offer relatively lower rates because they have an established deposit base. Smaller private sector banks, on the other hand, may offer higher interest rates to attract deposits.
Tenure is another important factor. A five-year fixed deposit at the same bank may offer a lower interest rate than a three-year deposit.
For example, the comparison shows that City Union Bank offers up to 7.3% for certain tenures, while HDFC Bank's rates for deposits of five years and above range between 6.15% and 6.4%.
What Do Depositors Need to Check Before Choosing an FD?
Interest rates are important, but they should not be the only consideration when selecting a fixed deposit.
Depositors should evaluate maturity amounts, premature withdrawal penalties, interest payout options and taxation before choosing an FD.
Interest income earned from fixed deposits is generally taxable according to the depositor's applicable income tax slab. This means the post-tax return may be significantly lower than the advertised interest rate.
Another important consideration is deposit insurance. The Deposit Insurance and Credit Guarantee Corporation (DICGC) provides insurance coverage of up to ₹5 lakh per depositor per insured bank. This includes both principal and interest, subject to the overall limit.
The insurance limit becomes particularly relevant for depositors holding large amounts in a single bank.
What's the Future of Bank FD Rates?
Future FD rates will be influenced by changes in monetary policy, liquidity conditions in the banking system and banks' funding requirements.
A bank offering the highest interest rate today may not continue offering the same rate in the coming months, as banks periodically revise their deposit rates.
The October 2026 comparison highlights significant differences in interest rates across banks and deposit tenures. However, matching the FD tenure with financial requirements, while considering post-tax returns and deposit safety, remains important when selecting a fixed deposit.
