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Good news for investors disappointed by declining fixed deposit (FD) returns. Suryoday Small Finance Bank has announced a significant increase in its FD interest rates, now offering 8% annual returns on a 5-year fixed deposit, which is among the highest rates currently available in the market. The revised rates came into effect on December 3, 2025.

8% Interest on 5-Year FD

According to the bank, both regular customers and senior citizens will receive a flat 8% interest rate on fixed deposits with a 5-year tenure. While short-term FDs continue to offer lower rates, the new long-term deposit rate is being seen as a highly attractive investment option, especially at a time when traditional banks have been gradually reducing deposit returns.

For short-term deposits, Suryoday Small Finance Bank is offering:

• 7.25% for 1-year fixed deposits

• Rates ranging from 4% to 6.75% for deposits with shorter maturity periods

Financial experts suggest that long-term investors looking for secure returns may find this offer particularly beneficial.

Revised FD Interest Rate Structure

Senior citizens typically earn an additional 0.20% interest in most slabs, making the long-term option even more lucrative for retired individuals who seek guaranteed income.

Safe Investment with DICGC Insurance

The bank has also highlighted that all FD, savings and recurring deposit accounts are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to ₹5 lakh, including both the principal amount and interest. This provides an added layer of trust and security to customers, ensuring that their money is protected even in the event of a banking crisis.

Why This FD Rate Matters

Over the last few years, falling interest rates on traditional savings products have pushed many investors toward market-linked instruments such as mutual funds and equities. However, these options involve risk and do not guarantee returns.

In the current financial environment, where:

• Inflation remains moderate,

• Market volatility is still high,

• And interest rates across major banks are averaging between 6% and 7%,

An 8% assured return on deposits can significantly strengthen financial planning for both individuals and families.

Many financial planners believe that combining secure FDs with selective market investments provides the right balance between stability and growth. For risk-averse investors, senior citizens, or those looking to build a contingency fund, this FD offer could be a strategic choice.

Should You Invest Now?

If you prefer guaranteed returns with zero market risk, this revised FD rate may be a strong opportunity. Investors are advised to compare offers across banks and evaluate tenure flexibility, premature withdrawal terms, and tax implications before committing funds.

Key Takeaways

• Suryoday Small Finance Bank now offers 8% interest on 5-year fixed deposits

• New FD rates effective from December 3, 2025

• 1-year FD interest: 7.25%

• Short-term deposits: 4% – 6.75%

• Senior citizens get an extra 0.20%

• All deposits insured under DICGC up to ₹5 lakh