The Reserve Bank of India (RBI) increased the policy repo rate by 25 basis points to 5.50% during its Monetary Policy Committee (MPC) meeting on October 7, 2026. This marked the central bank’s first repo rate hike in 44 months. Its previous increase was in February 2023, when the rate was raised to 6.50%.
The repo rate is the rate at which commercial banks borrow short-term funds from the RBI. Changes in this rate can influence the interest rates banks offer on loans and deposits. Following the latest increase, some banks have revised their fixed deposit (FD) rates to attract deposits and meet their funding requirements.
However, banks are not required to change FD rates immediately after a repo rate revision. Each lender decides its own deposit rates based on its requirements and policies.
For investors planning to put money into fixed deposits, comparing interest rates across banks is important. Here is a look at the highest FD rates offered by public and private sector banks, along with their rates for 1-year, 3-year and 5-year deposits.
Highest FD Interest Rates Offered by Public Sector Banks
Among public sector banks (PSUs), Bank of India and Punjab & Sind Bank are offering the highest maximum FD interest rate of 6.85% per annum.
It is important to understand that the highest slab represents the maximum interest rate available on an eligible FD tenure. It does not necessarily apply to deposits with a maturity period of one, three or five years.
The following table compares the maximum FD rates and interest offered by major public sector banks for different tenures.
| Public Sector Bank | Highest FD Rate | 1 Year | 3 Years | 5 Years |
|---|---|---|---|---|
| Bank of India | 6.85% | 6.50% | 6.70% | 6.00% |
| Punjab & Sind Bank | 6.85% | 5.85% | 5.85% | 5.95% |
| Indian Bank | 6.80% | 6.10% | 6.05% | 6.00% |
| Bank of Baroda | 6.75% | 6.25% | 6.25% | 6.30% |
| Central Bank of India | 6.75% | 6.10% | 6.00% | 6.00% |
| Bank of Maharashtra | 6.65% | 6.20% | 5.25% | 5.00% |
| Indian Overseas Bank | 6.60% | 6.50% | 6.10% | 6.10% |
| Canara Bank | 6.60% | 6.25% | 6.25% | 6.25% |
| Punjab National Bank | 6.60% | 6.25% | 6.35% | 6.10% |
| Union Bank of India | 6.55% | 6.20% | 6.10% | 6.00% |
| State Bank of India | 6.45% | 6.25% | 6.30% | 6.05% |
| UCO Bank | 6.45% | 6.10% | 6.00% | 6.00% |
<text size=”xs” color=”secondary”>Source: Paisabazaar | Interest rates as of October 28, 2026 | Senior citizen FD rates excluded.</text>
Which PSU Bank Offers the Best FD Rate by Tenure?
The highest rates among public sector banks vary depending on the deposit period:
- 1-year FD: Bank of India and Indian Overseas Bank offer the highest rate of 6.50% per annum.
- 3-year FD: Bank of India leads with an interest rate of 6.70% per annum.
- 5-year FD: Bank of Baroda offers the highest rate of 6.30% per annum.
Highest FD Interest Rates Offered by Private Banks
Private sector banks are offering higher maximum FD rates than public sector lenders in this comparison.
DCB Bank leads the list with a maximum interest rate of 7.50% per annum, followed by Bandhan Bank at 7.45%. Several other private banks are also offering competitive returns across different deposit periods.
The table below provides a comparison of their maximum FD rates and interest rates for 1-year, 3-year and 5-year tenures.
| Private Sector Bank | Highest FD Rate | 1 Year | 3 Years | 5 Years |
|---|---|---|---|---|
| DCB Bank | 7.50% | 6.90% | 7.00% | 7.50% |
| Bandhan Bank | 7.45% | 7.00% | 7.25% | 5.85% |
| SBM Bank | 7.30% | 7.10% | 7.10% | 7.00% |
| City Union Bank | 7.30% | 6.65% | 7.30% | 6.55% |
| Yes Bank | 7.25% | 6.65% | 7.00% | 6.75% |
| Tamilnad Mercantile Bank | 7.25% | 6.80% | 6.70% | 6.70% |
| Dhanlaxmi Bank | 7.25% | 6.25% | 6.50% | 6.50% |
| IDFC FIRST Bank | 7.10% | 6.50% | 7.10% | 6.75% |
| CSB Bank | 7.10% | 5.00% | 5.75% | 5.75% |
| RBL Bank | 7.00% | 6.90% | 7.00% | 6.70% |
| IndusInd Bank | 7.00% | 6.75% | 7.00% | 6.65% |
| Karnataka Bank | 7.00% | 6.50% | 6.15% | 6.15% |
| South Indian Bank | 6.80% | 6.35% | 6.20% | 5.70% |
| Jammu & Kashmir Bank | 6.75% | 6.55% | 6.70% | 6.75% |
| Kotak Mahindra Bank | 6.75% | 6.45% | 6.40% | 6.25% |
| Federal Bank | 6.70% | 6.25% | 6.50% | 6.40% |
| Karur Vysya Bank | 6.70% | 6.25% | 6.40% | 6.25% |
| ICICI Bank | 6.60% | 6.25% | 6.55% | 6.60% |
| Nainital Bank | 6.60% | 6.40% | 6.25% | 5.75% |
| IDBI Bank | 6.55% | 6.20% | 6.35% | 6.25% |
| Axis Bank | 6.50% | 6.25% | 6.50% | 6.50% |
| HDFC Bank | 6.50% | 6.25% | 6.45% | 6.40% |
| DBS Bank | 6.50% | 6.25% | 6.50% | 6.25% |
<text size=”xs” color=”secondary”>Source: Paisabazaar | Interest rates as of October 28, 2026 | Senior citizen FD rates excluded.</text>
Best Private Bank FD Rates for 1, 3 and 5 Years
Looking at individual deposit periods, the leading private banks are different for each tenure:
- 1-year FD: SBM Bank offers the highest interest rate of 7.10% per annum.
- 3-year FD: City Union Bank leads with a rate of 7.30% per annum.
- 5-year FD: DCB Bank offers the highest rate of 7.50% per annum.
Public vs Private Banks: Where Are FD Interest Rates Higher?
At the beginning of November 2026, DCB Bank is offering the highest maximum FD interest rate among the public and private sector banks included in this comparison, at 7.50% per annum.
Among public sector banks, Bank of India and Punjab & Sind Bank lead with maximum rates of 6.85%.
The best option for depositors will depend on how long they intend to keep their money invested. A bank offering the highest overall FD rate may not necessarily provide the best return for a particular 1-year, 3-year or 5-year deposit.
Before booking an FD, investors should compare the rate applicable to their chosen tenure and review the bank’s deposit conditions.
Disclaimer: This article is intended for general informational purposes only and should not be considered financial or investment advice. FD interest rates are subject to change and may vary depending on the deposit amount, tenure and applicable bank conditions. The rates mentioned are based on the information available as of October 28, 2026, and exclude senior citizen rates. Depositors should verify the latest rates, terms and conditions directly on the respective banks’ official websites before investing.