Bandhan Bank and IDFC First Bank are offering higher fixed deposit rates than SBI, yet differences in tenures, payout options, and safety protocols mean investors should look beyond headline rates for the best returns.
Bandhan Bank and IDFC First Bank are offering fixed deposit rates that edge above State Bank of India’s latest top rate, but the extra return comes with different tenures attached. According to Business Today, Bandhan Bank is advertising a highest regular FD rate of 7.45% for a 2-year deposit, while IDFC First Bank is offering 7.25% on a 3-year tenor. SBI’s highest regular rate is 6.45% and applies to a 444-day deposit.
That gap can add up, though only modestly on smaller sums. Business Today’s illustration shows that a ₹5 lakh deposit would earn ₹37,250 a year at Bandhan Bank, ₹36,250 at IDFC First Bank and ₹32,250 at SBI. On that basis, Bandhan would pay ₹5,000 more than SBI over a year, while IDFC First would pay ₹4,000 more. For a ₹10 lakh deposit, the difference rises to ₹10,000 and ₹8,000 respectively.
The comparison is not as straightforward as the headline rates suggest. IDFC First Bank says on its website that its fixed deposit rates range from 3.25% to 7.35% for general customers across tenures from 7 days to 10 years, with an extra 0.25% for senior citizens on selected tenures. It also offers monthly or quarterly payouts or cumulative interest paid at maturity.
That is why investors are being warned not to choose a fixed deposit on rate alone. Premature withdrawal rules, payout frequency, tax treatment and deposit insurance all affect the real outcome. Under the Deposit Insurance and Credit Guarantee Corporation scheme, eligible bank deposits are insured up to ₹5 lakh per depositor per bank, including principal and interest, which means the safety net is an important part of the decision alongside the interest rate.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
