3-Year Fixed Deposits: Best FD Rates 2025 up to 7.65% for Safe & Steady Returns

In times of market volatility, fixed deposits (FDs) continue to stand out as one of the safest investment options for Indian savers. Offering a guaranteed rate of return and capital protection, they provide peace of mind for those seeking stability.

For 2025, several banks—especially small finance banks—are offering 3-year fixed deposits with returns up to 7.65%, making them a lucrative choice for investors aiming for both safety and growth.

Small Finance Banks Offering the Highest FD Rates

Among small finance banks, Utkarsh Small Finance Bank currently leads with an impressive 7.65% interest rate on 3-year FDs.
Close behind are Slice Small Finance Bank and Jana Small Finance Bank, offering 7.50% each, while Suryoday Small Finance Bank gives 7.25% and AU Small Finance Bank offers 7.10%.

Other notable names like Equitas, Shivalik, and Ujjivan Small Finance Bank are offering between 7% and 7.20%, giving investors multiple reliable options to explore.

However, experts advise caution when investing in small finance banks. While deposits up to ₹5 lakh are insured under the Deposit Insurance and Credit Guarantee Corporation (DICGC), it’s wise to limit investments within this insured range for added safety.

Private Banks with Competitive Returns

Private sector banks maintain attractive interest rates for moderate-risk investors.
RBL Bank tops the list with 7.20%, followed by SBM Bank India (7.10%), and Bandhan Bank, Yes Bank, and DCB Bank, each offering 7%.

IndusInd Bank follows with 6.90%, while ICICI Bank and Axis Bank provide 6.60% each.
Even though these rates are slightly lower than those of small finance banks, private banks remain popular for their strong reputation and better service stability.

Public Sector Banks: Safety with Stability

Public sector banks, known for reliability, offer moderate yet secure returns.
Union Bank of India provides the highest rate at 6.60%, followed by Bank of Baroda (6.50%) and Punjab National Bank (6.40%). The State Bank of India (SBI), India’s largest public lender, offers 6.30% for 3-year FDs.

Though these rates are conservative, they continue to attract risk-averse investors who value trust and stability.

How to Choose the Right 3-Year FD

Your ideal FD depends on your risk appetite and return expectations:

• High returns: Choose small finance banks (stay within ₹5 lakh DICGC coverage).

• Balanced safety and returns: Go for private banks with steady track records.

• Maximum security: Opt for public sector banks like SBI or PNB.

With rates improving across the board, a 3-year fixed deposit in 2025 provides a balanced combination of safety, liquidity, and assured returns, making it ideal for both conservative and moderate investors.

Conclusion

Fixed deposits continue to be a dependable investment avenue in India. As interest rates improve, locking into a 3-year FD with competitive returns ensures stability and predictable growth. Whether you prefer a small finance, private, or public sector bank—FDs remain one of the best low-risk investment options in 2025.