Best fixed deposit rates: Top 5 FD plans with up to 8.85% interest per annum

The Reserve Bank of India (RBI) has delivered a cumulative 125 basis points (1.25%) interest rate cut in 2025, compelling banks and non-bank lenders to revisit their term deposit rates continually.

In the last bi-monthly MPC meeting of 2025, the central bank on December 5 slashed repo rate, the rate at which it lends to commercial banks in India, by 25 bps – leading to further softening of fixed deposit rates of banks and non-banking financial companies (NBFCs).

Despite the central bank easing the key rate, there are some non-bank lenders that still offer rates up to 8.85% on deposits, depending on tenures and investor category. Senior citizens are still offered up to 50 bps higher rates than regular customers.

Post RBI’s cumulative 125 bps rate cut, major public and private sector banks cut their FD rates to the range of 6.5–7.5% for regular investors. Many NBFCs also revised their rates downwards. For savers who enjoyed 8–9% rates earlier, this reduction in rates has been disappointing.

Top 5 corporate FD rates for senior citizens

Why are corporate FDs offering higher rates?

Unlike banks, NBFCs or housing finance companies often raise funds directly from the market to support their lending business. To attract deposits, they typically offer higher interest rates than banks. While this makes them attractive, it also means investors must evaluate safety carefully—because higher returns usually come with slightly higher risk.

Check safety ratings before investing

Corporate FDs are not equal. Some come from well-rated, long-standing companies, while others may carry higher credit risk.

Depositors should glance at credit ratings such as CRISIL AAA, ICRA AAA, or CARE AAA—these indicate the highest degree of safety. Ratings like AA or lower signal comparatively higher risk. A downgrade in ratings may affect investor confidence, so tracking rating updates is important.

A simple thumb rule: higher the rating, lower the risk—but also usually lower the return.

What about deposit insurance?

Another key difference between bank FDs and corporate FDs is insurance.

Bank deposits are insured under DICGC up to Rs 5 lakh per depositor per bank, covering principal plus interest.

Corporate FDs do not enjoy this insurance cover. If the company faces financial stress or defaults, investors may face delays or losses.

This makes due diligence crucial when choosing corporate FDs. Investors should check the company’s financial performance, promoter background, and track record in servicing deposits.

RBI guidelines and investor protection

NBFCs accepting public deposits are regulated by the RBI. They must maintain minimum credit ratings, submit periodic disclosures, and comply with deposit raising eligibility norms. Companies with poor compliance or deteriorating financial conditions are barred from accepting deposits.

Still, regulatory oversight does not eliminate all risk — hence caution is advised.

Should you invest?

Corporate FDs can be a smart option if:

-You want higher returns than banks offer,

-You choose reputed NBFCs with strong AAA or AA ratings,

-You stagger your deposits (laddering) to reduce risk.

Senior citizens, who generally get 0.25%–0.50% extra interest, may find these deposits even more attractive. However, if capital safety is your first priority, sticking to bank FDs or government-backed schemes may be better.