Highest FD rates: 5 banks offering up to 9% on 3-year fixed deposits; see full list

Fixed deposit investors have one more reason to rejoice as they continue to get an interest rate of around 9% on their deposits in select small scale financial banks. The high interest rate is offered for deposits below Rs 30 crore and for people below the age of 60 years. The tenure of these high interest rate deposits is three years.

Here is a list of small finance banks that offer an interest rate of up to 9% on fixed deposits with maturity in three years.

Northeast Small Finance Bank Fixed-Term Deposit Rate

NorthEast Small Finance Bank offers 9% interest rate on its FD with maturity in three years.

Suryoday Small Finance Bank Fixed Deposit Rate

Suryoday Small Finance Bank offers an interest rate of 8.6% on its FDs maturing in three years.

Utkarsh Small Finance Bank FD Rate

Utkarsh Small Finance Bank is offering 8.5% interest rate on its FD with maturity in three years.

Source: Interest rate data compiled by Paisabazaar as on September 11, 2024.

Jana Small Finance Bank Fixed-Term Deposit Rate

Jana Small Finance Bank offers an interest rate of 8.25% on its fixed deposit with maturity in three years.

Unity Small Finance Bank Fixed Deposit Rate

Unity Small Finance Bank offers an interest rate of 8.15% on its FD with maturity in three years.

Disclaimer: While deposits in small finance banks are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to Rs 5 lakh, experts advise investors to be cautious while investing in their fixed deposits. Given their unique business model, the risk associated with investing in fixed deposits of small finance banks may differ slightly from that of scheduled commercial banks. To mitigate potential risks, investors are advised to limit their exposure to fixed deposits of small finance banks to an amount that falls within the coverage of the DICGC. This ensures that your capital and interest are protected in unforeseen circumstances.

When is TDS deducted from bank fixed deposits?

According to the Bank of Baroda website, from September 14, 2024, “When a payment is received, the person making the payment is required to deduct tax before paying. The tax so deducted is called tax deducted at source (TDS), which the beneficiary is required to pay to the central government. Similarly, banks deduct TDS when they credit interest on a fixed deposit in a person’s account. However, 10% TDS is deducted only when the interest amount exceeds Rs 40,000 for persons other than the age of majority.”

Please note that TDS is not an additional tax, you can recover this tax as a refund or adjust it against your total tax liability at the time of filing Income Tax Return (ITR). Also, if you are eligible for a tax refund, then you might be eligible to receive interest on the tax refund.