Are Low FD Rates Disappointing You? THESE Banks Are Offering 8% Returns On Fixed Deposits

One of the most preferred investment options for risk-averse investors, fixed deposits (FDs), appear to be losing their shine following recent repo rate cuts. Several banks have revised their FD rates downward, resulting in lower returns for depositors.

While major lenders such as State Bank of India, Punjab National Bank, and HDFC Bank are now offering interest rates in the range of 6%-7%, a few banks continue to provide attractive rates between 7% and 8%, and in some cases, even higher.

Fixed deposits are one of the most valuable and preferred modes of investment for risk-averse investors. Many investors who dedicate a large chunk of their portfolios into equities also strive to keep a certain percentage of their savings in FDs.

Banks Offering FD Rates Between 7-8%

For those who are planning to start FDs, here are top five banks offering FDs at an interest rate in the range of 7-8%.

Jana Small Finance Bank

Jana Small Finance Bank (JSB) is offering an interest rate of 8% on recurring fixed deposits (FDs) for a duration of 60 months. The interest rate is higher around 8.5% for senior citizens in the same duration. The bank is offering FDs in the range of 6-8%.

Suryoday Small Finance Bank

Suryoday Small Finance Bank is offering the highest FD rate of 8.05% to its customers with a tenure of 5 years. Senior citizens can enjoy an additional 0.05% interest on the FD with a five-year duration. The bank is offering around 7.25% FD returns for a duration of 18 months to two years. The rates are similar for Suryoday Small Finance Bank recurring deposits in the five-year tenure.

Utkarsh Small Finance Bank

Utkarsh Small Finance Bank is offering 7.65% rates on FDs with a tenure of five years. The bank is offering the highest 7.65% for three years and two years tenure. Whereas, the interest rate is fixed at 6% for FDs in a duration of one years.

Bandhan Bank

The bank offers an interest rate of 7.7% on Fixed Deposits for a duration of two years or less than three years for senior citizens. Whereas, FD rates for the same tenure reduce to 7.2% for general customers. The minimum fixed deposit amount is Rs 1000 to start an FD.

TDS on FDs

Banks deduct tax deducted at source (TDS) if FD interest exceeds Rs 1 lakh in a particular bank. TDS isn't an extra tax; it can be refunded or offset against your total tax liability when filing your income tax return (ITR). If eligible for a tax refund, you might also receive interest on that refund.

For instance, under the new tax regime for FY 2025-26, if your income is Rs 11 lakh, you won't owe income tax due to the Section 87A rebate applicable to incomes up to Rs 12 lakh. Additionally, submitting Form 15G can help avoid TDS deduction if certain conditions are met.