Fixed deposits (FDs) continue to be one of the safest and most popular ways for people in India to save and grow their money. In June 2025, banks adjusted their FD rates due to recent changes in the country's economy and the Reserve Bank of India's (RBI) decisions. Some banks are offering higher interest rates to attract depositors, especially small finance banks. This article looks at the top five banks offering the highest FD interest rates this month, along with key points depositors should keep in mind.
Slice Small Finance Bank is offering one of the highest interest rates on fixed deposits this June. The bank gives up to 9.00% per year for deposits kept for one year. Senior citizens, who are usually offered extra interest as a benefit, can earn up to 9.50% per year at this bank.
Those who want to invest for a longer period, such as three years, can earn 8.25% per year (or 8.75% per year for senior citizens). These rates are higher than most large public and private sector banks.
It is important to know that small finance banks, including Slice, are covered by deposit insurance of up to ₹5 lakh. This means if the bank faces trouble, deposits up to ₹5 lakh are protected by law. Those investing larger amounts should be careful and may want to divide their money between different banks to stay within the insured limit.
Unity Small Finance Bank is another small finance bank offering high interest on fixed deposits. For a one-year FD, the interest rate is 8.60% per year for regular customers. Senior citizens get a better deal at 9.10% per year for the same tenure.
For a three-year fixed deposit, Unity Small Finance Bank offers around 8.00% per year, and senior citizens can earn 8.50% per year. These attractive rates make Unity a strong option for people looking to lock in their savings at high interest for short or medium terms.
As with other small finance banks, depositors should be aware of the ₹5 lakh insurance limit and consider spreading out their investments if putting in larger sums.
Suryoday Small Finance Bank also provides good rates in June 2025. This bank offers 8.40% per year on fixed deposits of one year and 8.40% per year for three-year deposits. Senior citizens get an extra benefit, earning 8.80% per year for a three-year FD.
Suryoday has made a name for itself by consistently offering high interest rates compared to bigger banks. However, like other small finance banks, it is important to stay within the insured limit for safety and peace of mind.
Among the bigger private sector banks, YES Bank is offering competitive FD rates in June 2025. A person investing for 36 to 60 months (which means three to five years) can earn up to 7.10% per year. Senior citizens can get up to 7.85% per year on these deposits.
YES Bank offers better rates than many other large private banks and provides the added trust of being a well-known name with a large network of branches across India. Those looking for a balance between safety and higher returns might consider YES Bank's offerings.
HDFC Bank, one of India's most trusted private banks, revised its FD rates recently after the RBI cut the repo rate by 50 basis points. This means interest rates across banks have gone down a little, but HDFC still offers attractive options.
For fixed deposits between 15 and 21 months, HDFC Bank gives 6.60% per year to regular customers and 7.10% per year to senior citizens. For deposits of three to five years, the rates are 6.40% per year for regular customers and 6.90% per year for senior citizens.
HDFC Bank is known for its stable services, and though the rates are a little lower than small finance banks, many depositors prefer the safety and convenience of a large, established bank.
Punjab National Bank (PNB), a large government-owned bank, offers 6.70% per year for 390-day fixed deposits and 7.20% per year for senior citizens.
Union Bank of India provides 6.85% per year for mid-term FDs and 7.35% per year for senior citizens. This makes it one of the better public sector choices for fixed deposits.
In June 2025, the Reserve Bank of India reduced the repo rate by 50 basis points, bringing it down to 5.50%. This was the second rate cut in the year, as the RBI tries to support the economy and encourage borrowing. When the RBI cuts the repo rate, it usually leads to lower interest rates on fixed deposits, because banks' cost of funds becomes cheaper.
Due to this, most large banks have reduced their FD rates slightly. For example, State Bank of India (SBI) now offers a maximum of 6.70% per year on fixed deposits, down from earlier levels.
Before investing in a fixed deposit, it is wise to keep a few things in mind:
Insurance limit: Remember that the deposit insurance covers only ₹5 lakh per bank. To stay safe, large sums can be divided among different banks.
Tenure matching needs: Short-term FDs are useful for money needed in the near future. Longer tenures can provide higher rates, but they also lock the money for more time.
Senior citizen benefits: Many banks offer 0.50% or more extra interest to senior citizens. It is important to check the exact rate before investing.
Rate trends: With the RBI cutting rates, FD rates could go lower in the future. Locking in higher rates now may help earn better returns.
Alternative options: Some people may also consider government schemes like the Senior Citizens Savings Scheme (SCSS) or certain debt mutual funds, which sometimes give better returns than fixed deposits.
In June 2025, small finance banks like Slice, Unity, and Suryoday are offering the highest interest rates on fixed deposits. Their rates are as high as 9.00% to 9.50% per year, especially for senior citizens. Among larger banks, YES Bank and HDFC Bank provide strong options, with rates between 6.60% and 7.85% per year, depending on the tenure and whether the depositor is a senior citizen.
Fixed deposits remain a good choice for those looking for safe and steady returns. However, it is important to balance high interest rates with safety, tenure, and insurance coverage while planning investments carefully.