Unity Bank, AU Small Finance Bank raise FD rates; senior citizens can earn up to 8.30%

Fixed deposit investors seeking higher returns have some fresh options, with Unity Small Finance Bank and AU Small Finance Bank revising interest rates on select tenures and offering improved returns to depositors.

The revised rates come at a time when fixed deposit yields across scheduled banks range from 2.5% to 8.1%, with small finance banks continuing to dominate the list of top FD rate providers.

Unity Bank new rates

Unity Small Finance Bank has increased interest rates on its popular 501-day fixed deposit scheme with effect from June 11, 2026.

Under the revised structure, general depositors will earn 7.80% per annum, while senior citizens can earn as much as 8.30% per annum on the same tenure.

The bank also offers 7.50% for one-year deposits to regular investors and 8% to senior citizens. For longer tenures ranging from 502 days to five years, rates stand at 6.75% for regular customers and 7.25% for senior citizens.

Apart from fixed deposits, Unity Bank offers attractive savings account rates as well. Deposits above ₹10 lakh earn 7% interest annually, while balances between ₹1 lakh and ₹10 lakh attract 6%.

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AU Small Finance Bank new rates

AU Small Finance Bank has also revised rates on select deposits, effective June 10, 2026.

The bank has increased the interest rate on its 30-month fixed deposit from 7.25% to 7.40%. Senior citizens will receive 7.90%, up from the earlier 7.75%.

For one-year deposits, AU Small Finance Bank offers 6.35%, while deposits of 12 months and one day to 15 months fetch 7.10%. Deposits with maturities between 30 months and 36 months now offer the highest rate of 7.40%.

Small finance banks continue to lead

Small finance banks continue to offer some of the highest returns in the fixed deposit market.

According to prevailing rates as of June 10, Suryoday Small Finance Bank and Utkarsh Small Finance Bank offer the highest rates among major banks at 8.10% for regular depositors.

Shivalik Small Finance Bank offers up to 7.80%, while Jana Small Finance Bank provides up to 7.77%. ESAF Small Finance Bank and Equitas Small Finance Bank offer up to 7.75%.

Among private sector banks, IDFC FIRST Bank and CSB Bank offer up to 7.35%, while Yes Bank, Bandhan Bank and Tamilnad Mercantile Bank provide rates of up to 7.25%.

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PSU banks

Public sector banks continue to offer relatively lower rates compared with small finance banks.

Indian Bank currently offers a maximum FD rate of 6.80%, while Punjab & Sind Bank provides up to 6.75%. Bank of India offers 6.70%, followed by Union Bank of India at 6.65%.

State Bank of India and Bank of Baroda offer maximum rates of 6.45%.

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Compare tenures carefully

Interest rates vary significantly across banks and tenures, making it important for investors to compare deposit periods before locking in funds.

While small finance banks offer higher returns, depositors should consider factors such as liquidity needs, tenure and deposit insurance coverage when choosing between banks.

With rates remaining elevated, investors willing to explore beyond large private and public sector banks can potentially secure returns of 7.5%-8.3%, particularly on special tenure deposits and senior citizen schemes.

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