Fixed Deposit Rates in August: Top Banks and NBFCs Offer Up to 8.5% Interest

Banks and NBFCs have revised their fixed deposit rates, with public sector lender Canara Bank offering rates between 3.25% and 6.50%. Small finance banks such as Jana, slice, Suryoday, and Unity offer rates up to 8%. Private sector banks like Bandhan, DCB, Jammu & Kashmir, and SBM Bank India offer rates up to 7.40%. The Reserve Bank of India has maintained the repo rate at 5.5%, prompting lenders to scale back on deposit rates.

Banks and Non-Banking Financial Companies (NBFCs) have recently revised their fixed deposit (FD) rates, with public sector lender Canara Bank offering rates between 3.25% and 6.50%. Small finance banks such as Jana, slice, Suryoday, and Unity are offering rates up to 8%, while private sector banks like Bandhan, DCB, Jammu & Kashmir, and SBM Bank India offer rates up to 7.40%. This comes despite the Reserve Bank of India (RBI) maintaining the repo rate at 5.5%, prompting lenders to scale back on deposit rates.

Canara Bank has revised its FD rates for general customers and senior citizens, effective August 7, 2025. For general customers, the highest rate of 6.5% will be offered on deposits with a tenure of 444 days. For senior citizens, FD rates range between 3.25% and 7%, with the highest rate of 7% offered on 444-day deposits [2].

Small finance banks are offering competitive rates. Jana Small Finance Bank offers a highest rate of 8% for a 5-year deposit, while slice Small Finance Bank offers 8.50% for a 18 months 1 day to 18 months 2 days deposit. Suryoday Small Finance Bank offers 8.20% for a 5-year deposit, and Unity Small Finance Bank offers 7.75% for a 1001 days deposit [1].

Private sector banks are also offering attractive FD rates. Bandhan Bank offers a highest rate of 7.30% for a 2 years to less than 3 years deposit, while DCB Bank offers 7.40% for a 27 months to less than 28 months deposit. Jammu & Kashmir Bank offers 7.30% for an 888 days deposit, and SBM Bank India offers 7.50% for a 5-year deposit [1].

The RBI's decision to maintain the repo rate at 5.5% has led to a reduction in FD rates. The RBI has cut the repo rate by 100 basis points so far in 2025, prompting many lenders to scale back on deposit rates [3]. However, despite the reduction in FD rates, fixed deposits remain a preferred choice for conservative savers due to their capital safety, predictable returns, and quick liquidity [1].

Interest earned on FDs is taxable, with tax deducted at source if it crosses a set limit. From Budget 2025, the TDS threshold has been raised to ₹50,000 for general citizens and ₹1 lakh for senior citizens [1].

References:
[1] https://www.business-standard.com/finance/personal-finance/fd-rates-in-august-up-to-8-5-interest-offered-by-public-private-sfbs-125081401000_1.html
[2] https://www.financialexpress.com/money/canara-bank-revises-fixed-deposit-savings-account-rates-check-new-fd-rates-for-general-customers-senior-citizens-3940865/
[3] https://www.business-standard.com/industry/banking/rbi-s-100-bp-repo-cut-in-repo-rate-leads-to-71-bps-cut-in-fresh-rupee-loans-125080801501_1.html