What is the current FD interest rate in India 2026?

FD rates in India range from 6.5% to 9.0% depending on the bank and tenure. Small finance banks offer higher rates up to 9%. Senior citizens get 0.25-0.5% extra.

How is FD interest calculated?

For compound interest FDs: A = P × (1 + r/n)^(n×t), where P = principal, r = annual rate, n = compounding frequency, t = years.

Which bank gives highest FD interest in India?

As of 2026, small finance banks like Unity SFB, Suryoday SFB offer rates up to 9%. Among major banks, SBI offers 6.5-7.5% and HDFC offers 6.6-7.75%.

Is FD interest taxable?

Yes. FD interest is taxable as per your income tax slab. TDS of 10% is deducted if interest exceeds ₹40,000 per year (₹50,000 for seniors).

What is the minimum FD amount?

Most banks allow FDs starting from ₹1,000. SBI minimum is ₹1,000, HDFC is ₹5,000, and some small finance banks start from ₹1,000.

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🏦 FD Interest Rates — Major Banks 2026

Bank	General Rate (2yr)	Senior Citizen Rate
SBI	7.00%	7.50%
HDFC Bank	7.25%	7.75%
ICICI Bank	7.25%	7.75%
Axis Bank	7.20%	7.70%
Kotak Mahindra	7.25%	7.75%
Bank of Baroda	7.15%	7.65%

💡 FD Tax Rules — What You Must Know

Interest is taxable as "Income from Other Sources" at your slab rate
TDS deducted at 10% if annual interest exceeds ₹40,000 (₹50,000 for senior citizens)
Submit Form 15G (non-senior) or 15H (senior) to avoid TDS if income is below taxable limit
5-year Tax Saver FD: Principal up to ₹1.5L qualifies under Section 80C
Premature withdrawal usually attracts 0.5–1% penalty on interest rate

FAQs

Is FD safe if the bank fails?

DICGC (Deposit Insurance and Credit Guarantee Corporation) insures bank deposits up to ₹5 lakh per depositor per bank. This covers principal + interest combined. For amounts above ₹5 lakh, spread across multiple banks. Post office FDs are 100% government-backed with no insurance limit.

Which is better — FD or debt mutual fund?

For 3+ year horizon: Debt mutual funds offer similar returns (7–8%) with better post-tax efficiency after indexation benefits. For less than 3 years or for guaranteed returns: FD wins for simplicity and certainty. Senior citizens and risk-averse investors generally prefer FD.