Last year, the Reserve Bank of India (RBI) reduced the repo rate by 125 basis points, bringing it down to 5.25%, the lowest since June 2022.
While this made home loans and personal loans cheaper, it also led to a decline in fixed deposit (FD) interest rates.
Earlier, many major banks offered FD rates above 8%. But as of early 2026, rates are at multi-year lows.
The good news is that some large banks still offer 7% or more for senior citizens, making FDs an attractive option for safe, fixed returns.
5-Year FD Rates: Top 5 Banks Compared
Here’s a snapshot of 5-year FD interest rates at five leading banks, updated as of 5 December 2025:
State Bank of India (SBI)
General: 6.05% p.a.
Senior Citizens: 7.05% p.a.
Punjab National Bank (PNB)
General: 6.00% p.a.
Senior Citizens: 6.80% p.a.
Bank of Baroda
General: 6.00% p.a.
Senior Citizens: 7.00% p.a.
HDFC Bank
General: 6.15% p.a.
Senior Citizens: 6.65% p.a.
ICICI Bank
General: 6.60% p.a.
Senior Citizens: 7.10% p.a.
Among these, ICICI Bank offers the highest interest rates for both general customers and senior citizens.
Small Finance Banks vs Large Banks
Small Finance Banks (SFBs) often provide higher FD rates, sometimes above 8% for senior citizens.
They do this to attract deposits and lend to higher-risk borrowers.
However, higher returns come with slightly higher risk, while large banks are considered safer because of:
RBI regulation and supervision
DICGC insurance coverage (up to ₹5 lakh per depositor)
Strong balance sheets and market reputation
Indirect government support for major banks
Experts recommend diversifying FDs across banks to stay within the DICGC insurance limit if your investment is large.
Key Takeaways
5-year FDs currently offer 6%–7.1% returns.
ICICI Bank leads in interest rates, while SBI and Bank of Baroda remain top choices for senior citizens.
Safety matters: Always consider the DICGC limit and a bank’s financial stability before chasing higher interest rates.
Even in a low-rate environment, FDs remain a safe and steady investment option, especially for conservative investors and senior citizens.
