The ongoing tension between Israel and Iran is not just a global political issue. Its effects are also being felt in India’s economy. Due to rising conflict, crude oil, energy, and essential commodity prices are increasing. This is creating pressure on inflation in the country.
If inflation continues to rise, the Reserve Bank of India (RBI) may increase the repo rate in the future. This could directly impact Fixed Deposit (FD) interest rates offered by banks.
At present, experts do not expect any immediate change in rates. However, a hike in the coming months cannot be ruled out.
The first clear signal will likely come from the RBI Monetary Policy Committee (MPC) meeting scheduled for 8 April 2026. All eyes are now on the RBI’s decision, as it may shape future interest rate trends.
FD Interest Rates Across Different Banks
FD interest rates in India currently vary from bank to bank. Generally, Small Finance Banks (SFBs) offer the highest interest rates, followed by private banks. Public sector banks (PSU banks) usually offer slightly lower returns but are considered more stable and safe.
Small Finance Banks Offering Higher Returns
Among small finance banks, some are offering attractive FD rates:
Suryoday Small Finance Bank offers around 8.10%, one of the highest rates currently.
Jana Small Finance Bank and ESAF Small Finance Bank are offering close to 8% returns.
Shivalik Small Finance Bank provides around 7.80% interest.
Slice Small Finance Bank offers approximately 7.75% on FDs.
These banks are currently giving the best returns among all categories.
FD Rates in PSU Banks
Public sector banks are offering slightly lower but stable returns:
Punjab & Sind Bank offers around 6.75% on a 666-day FD.
Bank of Maharashtra provides 6.65% on a 400-day FD.
Bank of India offers 6.6% under its Star Swarnim Scheme (450 days).
Canara Bank and Indian Bank also offer around 6.6% on specific FD tenures.
These banks are preferred by investors who prioritize safety over higher returns.
Private Banks FD Interest Rates
Private sector banks offer competitive FD rates between small finance and PSU banks:
IDFC FIRST Bank offers around 7.4% on a 390-day FD.
SBM Bank India provides about 7.3% for FDs slightly above 18 months.
Bandhan Bank offers 7.25% for 2 to 5 years.
Jammu & Kashmir Bank also gives 7.25% on an 888-day FD.
RBL Bank offers around 7.2% for 18 months to 3 years.
