How to Get the Best Returns from FDs

Fixed Deposits (FDs) are a go-to investment for Indian investors seeking safety and steady returns. With the right strategies, you can maximize your FD earnings without taking risks. 

This article shares practical tips to help you get the best returns from FDs in 2025, tailored for Indian folks looking to grow their savings smartly.  

Let’s see how to get the highest fixed deposit returns in India for 2025! 

Read also: It is Time to Rebalance Your Portfolio! Read How and Why?

Best Returns from FDs: Proven Ways to Get High Interest on Fixed Deposits

To score high interest rates, you need to shop around and strategize. Here are some top ways: 

• Compare Banks and NBFCs: Small finance banks like NorthEast Small Finance Bank offer up to 9% p.a., while big names like Bajaj Finance give 8.60% for senior citizens.

Check rates on bank websites or use tools like the RBI’s database to find the best deals. 

• Opt for Special Tenures: Banks often offer higher rates for specific periods, like 444 days at SBI (7.25%) or 42 months at Bajaj Finance (8.35%).  

 Align your investment with these tenures for better returns.  

• Choose Corporate FDs Wisely: Non-Banking Financial Companies (NBFCs) like Shriram Finance offer up to 9.40% p.a.  

Ensure they have high credit ratings (like CRISIL AAA) for safety.  

Real Story: Priya, a 35-year-old teacher from Mumbai, compared FD rates online and invested ₹2 lakh in a 546-day FD with NorthEast Small Finance Bank at 9%. Her returns were ₹18,450, much higher than the 7% she’d have earned with a public sector bank. 

Best Returns from FDs in 2025: Legal Tips to Maximize Your Earnings

Maximizing FD returns legally is all about smart planning.  

Here’s how:

Ladder Strategy

What it is:
Divide your total investment across FDs with different tenures (e.g., 1, 2, 3, 4, 5 years). 

Benefits: 

• Reduces interest rate risk 
• Ensures periodic liquidity 
• Helps reinvest at potentially higher future interest rates 

Example: Invest ₹5 lakh in 5 FDs of ₹1 lakh each with tenures from 1 to 5 years. Every year, one FD matures and can be reinvested. 

Barbell Strategy

What it is:
Split investment between short-term and long-term FDs – avoid medium-term ones. 

Benefits: 

• Combines high liquidity (short-term) with high returns (long-term) 
• Good during uncertain interest rate periods 

Example: ₹3 lakh in 1-year FD + ₹3 lakh in 5-year FD; skip mid-tenure like 2-3 years.

Bullet Strategy

What it is:
Invest in multiple FDs that all mature at the same time. 

Benefits: 

• Useful for planning big expenses (e.g., education, wedding, buying a house) 
• Maximizes compounding benefits if timed well 

Example: Invest ₹10 lakh today in multiple FDs, all maturing in 5 years. 

Sweep-in FD Strategy (Linked FD)

What it is:
Link FD with a savings/current account – excess amount gets converted to FD automatically. 

Benefits: 

• Earn FD interest on idle savings 

• Maintain liquidity, as funds auto-sweep back to savings if needed 

Example: Set a threshold of ₹25,000 in your savings account – any amount above gets auto-swept into an FD of 1-year tenure. 

Claim Tax Benefits:  

Invest in tax-saving FDs under Section 80C of the Income Tax Act. You can save up to ₹1.5 lakh in taxes, boosting your effective returns. 

FD Returns Comparison (₹1 Lakh, 5 Years) 

Highest FD Rates and Strategies for Indian Investors 

In 2025, small finance banks and NBFCs lead with the highest FD rates.  

NorthEast Small Finance Bank offers 9% for 546–1111 days, while Shriram Finance gives 9.40% for women and senior citizens.  

Public sector banks like Central Bank of India offer 7.50% for 3333 days. 

Strategies: 

• Senior Citizen Benefits: If you’re over 60, banks add 0.50–0.75% extra. Super seniors (80+) may get up to 0.80% more at banks like Indian Bank. 

• Auto-Renewal: Set FDs to auto-renew to lock in high rates without hassle. 

• Stay Within Insurance Limits: Keep FDs below ₹5 lakh per bank to stay covered by DICGC insurance, ensuring safety if the bank fails. 

Monthly Payout Plans for the Best Returns from FDs:

How to Boost Your Fixed Deposit Income

Need regular income? Non-cumulative FDs with monthly payouts are perfect for covering expenses like rent or EMIs. Here’s how to boost returns: 

• Choose High-Rate Banks: IndusInd Bank offers 7.75% with monthly payouts. For ₹1 lakh, that’s ₹645/month. 

• Combine with Cumulative FDs: Invest part in monthly payout FDs for income and part in cumulative FDs for growth. 

• Minimize TDS: Submit Form 15G/H if your income is below the taxable limit to avoid TDS deduction, keeping more money in your pocket. 

Example: Rajesh, a retiree from Chennai, invested ₹5 lakh in a 3-year non-cumulative FD at IDFC First Bank (7.90%).  He gets ₹3,291 monthly, covering his medical bills, while his principal stays safe. 

Smart FD Strategies to Ensure the Best Returns from FDs in India

To make your FD work harder, try these smart FD strategies for better returns in India: 

• Monitor Rate Trends: The RBI may cut rates in 2025, so lock in high rates now. 
• Use FD Calculators: Tools like Bajaj Finance’s FD calculator help compare returns across tenures and banks. 
• Diversify Across Banks: Spread investments to reduce risk and tap into high rates from multiple institutions. 

 What You Need to Know 

• Compare rates across banks and NBFCs for the best returns from FDs. 
• Use laddering, compounding, and tax-saving FDs to boost earnings. 
• Opt for monthly payouts for regular income, especially for retirees. 
• Prioritize safety with high-rated institutions and DICGC insurance. 

What’s your FD strategy? Share your tips in the comments or ask for personalized advice! 

Disclaimer