New Delhi: Fixed deposit investors looking for higher returns have several small finance bank (SFB) options in August 2026, with some lenders offering interest rates of 8% or more for select tenures. Suryoday Small Finance Bank has revised its FD rates from August 15, with senior citizens eligible for up to 8.50% per annum on a five-year deposit. Regular customers can earn up to 8.25% on the same tenure.
The latest comparison shows that small finance banks continue to offer some of the highest FD rates available to retail depositors. However, the highest rate usually applies only to a particular tenure and may differ for regular customers and senior citizens.
Suryoday SFB offers up to 8.50%
Suryoday Small Finance Bank revised its FD interest rates with effect from August 15, 2026, for deposits below ₹3 crore.
Senior citizens can earn 8.50% per annum on five-year FDs, while the corresponding rate for regular customers is 8.25%. The annualised yield is 8.77% for senior citizens and 8.51% for regular customers.
For a 30-month FD, Suryoday offers 8.25% to senior citizens and 8.10% to regular customers. On an 18-month deposit, the rates stand at 7.95% and 7.80%, respectively.
The bank offers FD tenures ranging from seven days to 10 years, giving depositors options across short-, medium- and long-term investment periods.
Top 10 banks offering high FD interest rates
According to FD data updated on August 14, 2026, the following banks feature among those offering the highest rates:
| Bank | Highest FD rate |
|---|---|
| Suryoday Small Finance Bank | 8.10% |
| Utkarsh Small Finance Bank | 8.10% |
| Jana Small Finance Bank | 8.00% |
| Shivalik Small Finance Bank | 8.00% |
| Equitas Small Finance Bank | 8.00% |
| Ujjivan Small Finance Bank | 7.80% |
| ESAF Small Finance Bank | 7.75% |
| SBM Bank | 7.65% |
| DCB Bank | 7.50% |
| Unity Small Finance Bank | 7.50% |
These figures represent the highest rates available under specific FD products and tenures, rather than a single rate applicable to every deposit period.
Suryoday and Utkarsh lead the list
Suryoday Small Finance Bank and Utkarsh Small Finance Bank are tied for the highest rate in the comparison, at 8.10% per annum.
For investors, however, the headline rate alone should not determine the choice of bank. The tenure on which the rate is offered is equally important.
For example, current comparisons show that small finance banks often offer their highest rates on specialised tenures such as 500-700 days or around two to three years. A depositor who wants a one-year FD may therefore receive a considerably different rate.
Jana, Shivalik and Equitas offer up to 8%
Jana Small Finance Bank, Shivalik Small Finance Bank and Equitas Small Finance Bank are next on the list, with maximum rates of 8%.
Jana has been offering competitive rates across medium-term deposits, while Shivalik’s highest rates are linked to specific tenure bands. Equitas also offers elevated rates for selected periods.
This makes it important for investors to compare the exact maturity period rather than simply looking at the maximum advertised rate.
Ujjivan offers up to 7.80%
Ujjivan Small Finance Bank features next with a maximum FD interest rate of 7.80% in the comparison.
Its rates can vary substantially depending on the deposit period. An investor looking at a one-year or two-year FD should therefore check the applicable slab before making a decision.
The same principle applies to all banks offering special-tenure FDs.
ESAF, SBM and other banks
ESAF Small Finance Bank offers rates of up to 7.75%, while SBM Bank offers up to 7.65%.
DCB Bank and Unity Small Finance Bank complete the top 10 list, with maximum rates of 7.50% each.
Although these rates are below the maximum offered by the leading SFBs, they can still be attractive compared with rates available from several large commercial banks.
For comparison, the data cited in the latest report puts the highest regular FD rate at 6.45% for SBI, 6.75% for Bank of Baroda, and 6.50% each for HDFC Bank and ICICI Bank.
Why small finance banks offer higher FD rates
Small finance banks generally use competitive deposit rates to attract funds and expand their customer base.
Their FD products can therefore offer higher interest rates than those available at many larger banks. However, investors should not interpret a higher interest rate as meaning that the deposit is automatically a better choice.
The bank’s financial position, deposit insurance coverage, premature withdrawal rules and the exact terms of the FD should all be considered before investing.
Senior citizens can earn more
Senior citizens generally receive an additional interest-rate benefit on bank FDs.
The difference can be significant for investors choosing an SFB. In Suryoday’s latest revised rates, for example, the maximum rate for senior citizens is 8.50%, compared with 8.25% for regular customers.
Other small finance banks also provide additional interest for senior citizens, although the premium varies between lenders and tenures.
Higher rate does not mean higher return in every case
Investors should also distinguish between the nominal interest rate and annualised yield.
Suryoday’s five-year FD, for example, offers 8.25% per annum to regular customers but has an annualised yield of 8.51%. For senior citizens, the 8.50% rate corresponds to an annualised yield of 8.77%.
The final amount received at maturity will depend on the interest payout option and compounding frequency.
Check the tenure before investing
The biggest mistake an investor can make is choosing an FD purely because its advertised maximum rate looks attractive.
A bank may offer 8% or more for a special tenure while offering a substantially lower rate for a standard one-year or five-year deposit.
Current comparisons show that some of the most competitive SFB rates are concentrated around two to three years, although individual banks have different slabs.
Investors should therefore first decide when they need the money and then compare rates for that specific period.
Deposit insurance is also important
Before putting a large amount into an FD, investors should also understand the applicable deposit insurance framework.
Bank deposits are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) subject to its prescribed limit and conditions. Therefore, investors with substantial savings may consider how they distribute their deposits across banks rather than concentrating a very large amount with a single lender.
The interest rate should be considered alongside safety, liquidity and tax implications.
FD interest is taxable
FD interest is generally taxable according to the investor’s applicable income-tax slab.
Therefore, an 8% FD does not necessarily translate into an 8% post-tax return.
For investors in higher tax brackets, the effective return after tax can be considerably lower. This is particularly relevant when comparing bank FDs with other fixed-income investments.
Should you choose the highest FD rate?
The highest rate can be attractive, particularly for investors seeking predictable returns and willing to lock away their money for the required tenure.
However, the decision should be based on more than the headline percentage.
Investors should compare the tenure, senior-citizen benefit, premature withdrawal rules, payout frequency, taxation and deposit insurance before opening an FD.
It is also important to verify the latest rate directly with the bank because FD rates can change without much notice.
Conclusion
Small finance banks continue to offer some of the most competitive FD rates in India in August 2026. Suryoday Small Finance Bank and Utkarsh Small Finance Bank lead the latest comparison at 8.10%, while Jana, Shivalik and Equitas offer rates of up to 8%.
Suryoday’s latest revision is particularly notable for senior citizens, who can earn 8.50% per annum on a five-year FD, while regular customers can earn up to 8.25%.
However, investors should not choose an FD solely because it carries the highest advertised rate. The applicable tenure, tax liability, liquidity requirements, deposit insurance and overall financial position of the bank should all be considered before investing.