According to Gaurav Singh Parmar, Associate Director, Fincorpit Consulting, by keeping rates unchanged, the RBI has given fixed deposit (FD) investors a period of clarity.
“The window to book double-digit nominal returns (some small finance banks offer 9–9.5%) is still open,” he said.
“Retail investors who spent two years pursuing overpriced mid-cap stocks are now returning to safer investment options. The Nifty index has seen a 12% drop from its peak, which, along with the fixed income ‘TINA’ (There Is No Alternative) trend, has increased the appeal of FDs. They have returned to their role as a core holding during uncertainty because their reliability gives investors a sense of security,” Parmar said.
Why RBI’s decision will sustain the attractiveness of FDs?
“In a phase where equity markets are witnessing heightened volatility and global uncertainties remain elevated, risk-averse instruments like FDs and RDs are once again gaining attention as a relatively safe haven. The pause in rates also provides better visibility on returns, which improves their appeal for investors prioritising capital protection and income stability,” said Amit Prakash Singh, Co-founder and CBO, Urban Money.
“At the same time, while FDs may see a cyclical rise in popularity, investors should avoid over-allocating to fixed income instruments. Real returns may still be affected by inflation over the long term, and relying only on FDs could limit wealth creation. A balanced asset allocation strategy, combining fixed income with equities and other growth-oriented instruments, remains essential to optimise returns and manage changing market conditions,” he added.
“The recent equity market downturn, which saw continued FII selling along with geopolitical instability, has led risk-averse retirees and mid-career workers to focus on protecting capital. Fixed deposits now serve as more than just a default option. They act as a planned pause during unpredictable market conditions,” said Siddharth Maurya, Founder and Managing Director of Vibhvangal Anukulakara Private Limited.
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How fixed deposit investors can plan
“Don’t wait for a future cut to act,” said Parmar.
“I recommend placing surplus emergency funds and near-term financial goals into fixed deposits with tenures of up to eighteen months. The five-year tax-saver fixed deposit should be avoided at this stage because it can restrict liquidity,” he said.
According to Adhil Shetty, CEO of BankBazaar.com, select private bank tenures are offering up to 7.4%, with several others in the 7–7.2% range. Senior citizens can earn an additional 25–50 basis points on most products.
“The rate trajectory from here is uncertain — the MPC has warned that a supply shock could turn into a demand shock if energy prices remain high. Depositors would be better placed locking in at current levels rather than assuming rates will stay unchanged. Laddering across multiple tenures can help manage reinvestment risk without affecting near-term returns. PPF at 7.1% and SCSS at 8.2% continue to offer strong sovereign-backed alternatives to bank FDs,” he said.
Best FD rates as of April 1, 2026, as per data compiled by Paisabazaar:
Small finance banks
ESAF Small Finance Bank
Highest interest: 8.00% (501 days)
1-year: 4.75%
3-year: 6.00%
5-year: 5.75%
10-year: 5.75%
Jana Small Finance Bank
Highest interest: 8.25% (385 to 400 days)
1-year: 7.00%
3-year: 7.50%
5-year: 7.77%
10-year: 6.50%
Shivalik Small Finance Bank
Highest interest: 7.80% (21 months 1 day to 22 months)
1-year: 6.00%
3-year: 6.75%
5-year: 6.25%
10-year: 6.25%
Suryoday Small Finance Bank
Highest interest: 7.90% (5 years)
1-year: 7.25%
3-year: 7.25%
5-year: 7.90%
10-year: 7.25%
Private sector banks
Bandhan Bank
Highest interest: 7.25% (2 years to less than 3 years)
1-year: 7.00%
3-year: 7.00%
5-year: 5.85%
10-year: 5.85%
DCB Bank
Highest interest: 7.15% (60 months to 61 months)
1-year: 6.90%
3-year: 7.00%
5-year: 7.15%
10-year: 7.00%
Jammu & Kashmir Bank
Highest interest: 7.25% (888 days)
1-year: 6.75%
3-year: 6.65%
5-year: 6.60%
10-year: 6.60%
RBL Bank
Highest interest: 7.20% (18 months to 3 years)
1-year: 7.00%
3-year: 7.20%
5-year: 6.70%
10-year: 6.70%
SBM Bank India
Highest interest: 7.85% (391 days to 15 months)
1-year: 7.10%
3-year: 7.10%
5-year: 7.00%
10-year: 7.00%
Public sector banks
Bank of Maharashtra
Highest interest: 6.65% (400 days)
1-year: 6.20%
3-year: 5.25%
5-year: 5.00%
10-year: 5.00%
Indian Bank
Highest interest: 6.60% (444 days)
1-year: 6.10%
3-year: 6.05%
5-year: 6.00%
10-year: 6.00%
Indian Overseas Bank
Highest interest: 6.60% (444 days)
1-year: 6.50%
3-year: 6.10%
5-year: 6.10%
10-year: 6.10%
Punjab National Bank
Highest interest: 6.60% (444 days)
1-year: 6.25%
3-year: 6.30%
5-year: 6.10%
10-year: 6.00%
Union Bank of India
Highest interest: 6.60% (444 days)
1-year: 6.30%
3-year: 6.25%
5-year: 6.00%
10-year: 6.00%