For Indian savers, choosing the right bank for a fixed deposit is a crucial financial decision. While longer tenures often promise better returns, the rule isn't universal, making a detailed comparison essential. A seemingly small difference in the interest rate can significantly impact your final maturity amount over time.
Why Comparing 3-Year FD Rates Matters
Financial experts often point out that the 3-year fixed deposit tenor strikes a balance between yield and liquidity. However, the rates offered vary widely between private and public sector banks. Even a marginal gap of 50 basis points (0.50%) can translate to substantial extra earnings. For example, on an investment of ₹10 lakh, a 50 bps higher rate over three years can generate additional interest of approximately ₹15,000. This underscores the importance of shopping around before locking in your funds.
Leading Private Banks: Latest 3-Year FD Rates
As of early 2026, several major private banks have revised their deposit schemes. Here is a snapshot of their offerings for the 3-year tenure:
HDFC Bank, the country's largest private lender, provides an interest rate of 6.45% for general depositors. Senior citizens earn a more attractive 6.95% on their fixed deposits of the same duration.
ICICI Bank matches this offer, also providing 6.45% to regular customers and 6.95% to senior citizens on its 3-year FDs.
Kotak Mahindra Bank offers a slightly lower rate of 6.40% for the general public and 6.90% for seniors on this tenor.
Among private banks, Federal Bank currently leads with its revised rates effective from 1 January 2026. It offers 6.75% to regular depositors and a robust 7.25% to senior citizens for a 3-year fixed deposit.
Public Sector Bank Offerings for 3-Year FDs
State-owned banks, known for their stability, have their own rate structures. Their rates are generally competitive, though often different from their private counterparts.
State Bank of India (SBI), the largest public sector bank, offers 6.30% for regular citizens and 6.80% for senior citizens on a 3-year fixed deposit.
Union Bank of India's latest rates, as of 5 December 2025, stand at 6.00% for the general public and 6.50% for senior depositors.
Canara Bank, with rates effective from 5 January 2026, provides 6.25% to regular customers and 6.75% to senior citizens for this deposit period.
Making an Informed FD Investment Choice
The data clearly shows a variance in returns across banks. For instance, choosing Federal Bank over a bank offering 6.25% for a regular 3-year FD can mean a 0.50% higher yield. Savers, especially senior citizens who benefit from preferential rates, must scrutinize these details. The key takeaway is to never assume rates are uniform. Always check the latest updates from banks, as rates are subject to periodic revision based on monetary policy and bank-specific strategies. A careful comparison today can ensure your hard-earned savings work harder for you over the next three years.
