Banks hike FD rates on select tenures; pick one that suits you

During the festive season, leading banks like the State Bank of India (SBI), HDFC Bank, IDBI Bank, etc. have raised their fixed deposit (FD) interest rates for a limited period to attract investors. These banks have revised the interest rates on FDs after the Reserve Bank of India (RBI) hiked its repo rate by 50 bps (100 basis points = 1 percentage point) to 5.90 percent in September.

Small finance banks lead with the highest interest rates, followed by small private banks. The public sector banks are not competitive about increasing interest rates like other banks. The average interest rates of the top 10 banks is 7.33 percent for FDs. The tenor varies with the bank, according to data compiled by BankBazaar.

Fixed deposits offer liquidity and assured interest income at regular intervals. Thanks to the ample liquidity they promise, FDs can be useful while building an emergency corpus. Here are the top 10 banks offering the best interest rates on FDs this festive season.

Ujjivan Small Finance Bank offers 7.7 percent interest on FDs. Among small finance banks, they offer the best interest rates. The investment tenor is 990 days.

At 7.5 percent, Federal Bank offers the best interest rate among private banks. The investment tenor is 700 days. Equitas Small Finance Bank also offers 7.50 percent interest on FDs. The investment tenor is 888 days.

Suryoday Small Finance Bank offers 7.49 percent interest. The investment tenor is 999 days.

IDFC First Bank, RBL Bank, and Yes Bank offer 7.25 percent interest on FDs. The investment tenor is 750 days, 725 days, and between 20-22 months, respectively.

Karnataka Bank offers 7.20 percent interest on FDs. The investment tenor is 555 days.

City Union Bank and DCB Bank offer 7.10 percent interest on FDs. The investment tenor is 700 days.

Leading banks including the SBI, Bank of Baroda (BoB), HDFC Bank, and IDBI Bank also have a limited period festive offer to invest in FDs. The investment tenors are 1,000 days, 555 days, and from 3 years 1 day up to 5 years and 555 days, respectively. SBI and HDFC offer 6.10 percent interest on FDs, BoB offers 6 percent, and IDBI Bank offers 6.40 percent interest.

Small finance banks and smaller private banks are offering higher interest rates to raise fresh deposits. The Deposit Insurance and Credit Guarantee Corporation, a subsidiary of the central bank, guarantees investments in fixed deposits of up to Rs 5 lakh.

The data on FDs is as of October 25, 2022, as given on bank websites. Listed (BSE) public and private banks, and foreign Banks, were considered for data compilation by Bankbazaar. Banks whose websites don't mention special tenor deposits are not considered. If there are multiple special tenor FDs offered by a bank, only the tenor with the highest interest was considered.