Investment Tips: Top 10 Banks Offering the Highest Interest on 3-Year Fixed Deposits in 2025

Fixed Deposits (FDs) remain one of the most trusted and safe investment options for Indian investors. Among the various tenures available, a three-year FD strikes the perfect balance between safety, liquidity, and returns. However, with banks offering different interest rates, choosing the right institution becomes crucial.

Here’s a detailed look at the top 10 government and private banks currently offering the highest FD interest rates for three years, along with the potential returns on an investment of ₹1 lakh.

1. IndusInd Bank – 6.75% Interest

IndusInd Bank leads the chart among private banks with a 6.75% interest rate. A ₹1 lakh deposit grows to ₹1,20,250 after three years. This makes it the most rewarding option for those seeking higher yields in the private sector.

2. Axis Bank – 6.60% Interest

Axis Bank offers 6.6% interest on a three-year FD. An investment of ₹1 lakh matures at ₹1,19,800. It’s a strong choice for investors who want both stability and better-than-average returns.

3. ICICI Bank – 6.60% Interest

Matching Axis Bank, ICICI Bank also provides a 6.6% return. A ₹1 lakh FD becomes ₹1,19,800 in three years. Being one of the largest private banks, ICICI ensures credibility with competitive interest rates.

4. Punjab National Bank (PNB) – 6.50% Interest

Among government banks, Punjab National Bank stands out with 6.5% interest. A ₹1 lakh investment will grow to ₹1,19,500 after three years, making it the best option in the public sector.

5. HDFC Bank – 6.40% Interest

HDFC Bank, India’s biggest private bank, offers 6.4% interest on a three-year FD. This turns a ₹1 lakh deposit into ₹1,19,200. Known for stability, HDFC is a preferred choice for risk-averse investors.

6. Kotak Mahindra Bank – 6.40% Interest

Kotak Mahindra Bank also provides a 6.4% return, with ₹1 lakh growing to ₹1,19,200 in three years. It is a balanced option in the private banking space.

7. Bank of Baroda – 6.40% Interest

Bank of Baroda, a leading public sector bank, matches the 6.4% rate. Investors putting in ₹1 lakh can expect ₹1,19,200 on maturity, combining government trust with fair returns.

8. Union Bank of India – 6.40% Interest

Union Bank also joins the list with 6.4%. A ₹1 lakh FD becomes ₹1,19,200 at maturity, making it a good option for those seeking consistent and secure returns.

9. State Bank of India (SBI) – 6.30% Interest

India’s largest bank, SBI, offers 6.3% on three-year FDs. A ₹1 lakh deposit here will be worth ₹1,18,900 after three years. While the returns are slightly lower, SBI’s trust factor and nationwide presence remain unmatched.

10. Canara Bank – 6.25% Interest

Canara Bank is offering 6.25% on a three-year FD. This means a ₹1 lakh investment grows to ₹1,18,750. It’s a safe choice for conservative investors who prefer government-backed banks.

Key Takeaways for Investors

• Private banks like IndusInd, Axis, and ICICI are offering the highest rates, with IndusInd leading at 6.75%.

• Public sector banks provide slightly lower returns, but their reliability makes them attractive.

• A small difference in percentage can make a significant impact on long-term earnings.

• Always check for premature withdrawal rules and penalties before locking your money.

Final Word

A three-year FD is ideal for investors looking for medium-term stability with guaranteed returns. While IndusInd Bank currently offers the highest yield, banks like PNB and SBI provide trust and security that attract many depositors.

Before investing, compare rates, evaluate your liquidity needs, and choose a bank that aligns with both your financial goals and risk comfort.