Which are safe banks for Fixed Deposits in India (2023)?

Bank fixed deposits (or FDs) are considered to be one of the safest savings options because of their guaranteed returns. And this has been the perception since decades.

But people have now started asking which bank is safe for fixed deposit? Or which is the safest bank for fixed deposit in India (2023)? Why are they concerned about the safety of fixed deposits now?

The reason is that the recent events in the banking space (like Yes Bank, PMC Bank, etc. where restrictions on withdrawal were placed temporarily) have raised the question that earlier wasn’t asked – Is my bank Fixed Deposit safe?

Most people don’t even think about losing capital or a bank’s own solvency issues when making fixed deposits. They simply go with the option which pays the highest interest rate possible. They don’t even consider for a moment about bank failures or which is the safest bank for fixed deposit in India 2023?

Now small banks, new banks and some NBFCs offer higher interest rates on FDs to customers as compared to other top banks like State Bank of India (SBI), HDFC Bank, ICICI Bank, etc. to name a few. But where there is comparatively higher return, it means there is higher risk as well.

So the next question is or should be: Which are safe banks for Fixed Deposits in India (2023)?

I will say that most Indian banks are safe most of the times. RBI does its job fairly well and hence, problems if any are more or less very rare. But that doesn’t mean that you can put all banks in the same risk bucket.

So your bank Fixed Deposits (FDs) are safe. But you need to be careful which bank you put your FDs in. Remember that Fixed Deposits are good for short term. So you wouldn’t want any risk to this money.

If I were you, then I would give priority to the safety of the bank as well as ensuring the return of capital and not just return on capital on my bank FDs.

So with that said, which are safe banks for Fixed Deposits in India (2023)?

I would say its best to stick and park major chunk of your deposits with the RBI-identified Systematically Important Banks (D-SIBs). You can read about it here. These are banks that are too-big-to-be-allowed-to-fail banks of India.

And these are State Bank of India (SBI), HDFC Bank and ICICI Bank.

Only three for now. RBI may add to this list in future as better and stronger banks emerge.

So you can say that these are the safest bank for fixed deposits in India. Even RBI feels that these banks are important enough to be identified separately. And if these banks fail, then you can be sure that there would be far bigger problems in the country then.

  • Is ICICI Bank safe for Fixed Deposits?
  • Is HDFC Bank safe for Fixed Deposits?
  • Is SBI (State Bank of India) safe for Fixed Deposits?

I hope you got the answers as these 3 banks have been identified as systematically important domestic banks of India by RBI itself. I won’t go the extent of saying that these are the safest banks for fixed deposits, but yeah, it’s pretty close to that.

Please do note that I am not saying that all other banks (or other public sector banks) are bad. Nothing like that. It’s just that these are very large and very important banks which the government will go to its limits to ensure that they don’t go bad. Risks are still there. But lesser in these banks. And how safe are fixed deposits in all other nationalized banks in general? Pretty safe I will say. Not trying to create any panic via this article. Just trying to highlight the various points one should consider while picking banks for FDs.

So now you know how to think properly about which bank is safe for fixed deposit in India (2023)?

Since we are talking about deposits, you should also know that the Deposit Insurance and Credit Guarantee Corporation (DICGC), which is an RBI subsidiary, insures your deposits with all commercial and cooperative banks. Yes. But not all of your deposits. The DICGC will compensate you only up to Rs 5 lakh for all your deposits and savings in various accounts in any one bank. That’s it. This limit was recently enhanced in 2020 Budget from the earlier deposit insurance limit was just Rs 1 lakh. That is current limit is Rs 5 lakh insurance from DICGC. You can read more about deposit insurance on DICGC’s website using this link and also on RBI’s website having FAQs on the topic.

But it must also be said that Rs 5 lac is a small amount for many of you. So it won’t be much of a help. And even if this guarantee was to be invoked at the failure of any bank, don’t assume that money will be refunded to you overnight. It will take time to come back.

Now I understand that for many it’s not possible to just stick with these 3 banks. You may have problems or compulsions. So a few more points to consider:

  • If you have a large enough FD portfolio, try to spread your fixed deposits across a few banks. Major chunks in the safe ones. And some in others most probably offer higher FD interest rates than bigger banks. It’s like spreading your bets plain and simple.
  • You can also spread money across family members to use the Rs 5 lac insurance angle for each one instead of just one person.
  • Instead of making one large FD, make a few smaller ones. You can even make a ladder of fixed deposits maturing at regular intervals to handle reinvestment risk.
  • Nowadays, there is a new option for FD investors where they get a floating interest rate on their FDs. I have also written about this flexible FD in detail here – whether floating rate FD is a good investment option for depositors in India or not.
  • What about corporate deposits from NBFCs? They are risky and they do offer quite high rates which no doubt can be tempting. But that doesn’t mean that you should avoid all company FDs. Just beware of unusually high-interest rates that some company FDs may offer. Study the company’s background and credit rating. And simply stick with the most reputed and trustworthy names having AAA ratings. Also, try and limit your exposure to these deposits to a small part of your FD portfolio. Don’t be too adventurously greedy to generate high returns from FD. If you want high risk-taking and high returns, go and invest in equity markets.
  • If you understand how to pick debt funds properly, then even debt funds can be a good option for many as a sort of replacement for fixed deposits. But debt funds are not risk-free. So first, do understand what debt funds are not and have the right expectations from debt funds before you invest in them.
  • But do understand bank FD interest taxation and how debt funds win in this aspect as debt fund taxation is very different.

Those are just a few general suggestions. There may be many other best practices I am sure you may also know about.

But that’s it. One of the problems is that most people in India look for which bank best-fixed deposit interest rate OR which bank is best for fixed deposits in India OR which bank gives a higher interest rate on FD in India OR which bank gives the highest FD interest rate in India.

It’s good to search for the best.

But don’t ignore the risks. These risks are mostly hidden but when they come in front, they can shatter your finances as has happened many times in past with people investing in deposits of poorly managed small banks and deposits of shady organizations.

By the way, if you are a senior citizen, then you have other decent options as well. You can read Best Interest Income Options for Senior citizens to know more.

Related Reading – Will FD Rates Increase in Future?

At times, banks occasionally launch limited-period special deposits for senior citizens which pay comparatively higher interest rates. Even those from the larger banks can also be good bets for senior citizens or retirees.

Note – If you are looking for monthly interest from fixed deposits, then you may like to read monthly interest Rs 1 crore fixed deposit OR monthly interest Rs 2 crore fixed deposit OR monthly interest Rs 50 lakh fixed deposit.

So hopefully, this post would have given you some idea about which is safe bank for fixed deposit in India and which bank is safe for fixed deposit (2023)? So be cautious about your bank FDs and don’t go only after the highest FD interest rates.

PS – Please do note that I am not saying that all other banks are bad. Just trying to highlight the various points one should consider while picking banks for FDs. Not trying to create any panic via this article.


  1. Nothing specially written as expected from specialist.persons going for fd generally follow these.

    1. Rightly pointed specially all these aspects are well known to person above 50+. I would say if you go 50 lakes, keep it ten different banks, you will get financial records easily thru various websites, calculated risk, when capital adequacy ratio is not fine with any bank, better to close premature n say bye to that bank, no sentiment whatsoever

  2. I am a just retired pensioner and fix deposited my all amount in BAJAJ FINANCE LIMITED bank. Please suggest me if i withdraw said amount from this bank???

    1. It is very risky…bajaj finance is NBFC ..your money is not safe as it is private but offering high rate of interest..

  3. I don’t understand what is wrong with the PSBs. All are government owned. If a government owned bank fails, then it’s the failure of the government. This gentleman is trying to create doubts in the mind of the common people

  4. Yes, this gentle man is trying to create panic in our mind. All PBS banks are safe for investment in comparison to any private sector banks of india. They are more safe than ICICI or HDFC bank, because govt is monitoring these banks and infusing capital when required. If these banks fail means failure of Govt of India…….the govt may not move to repay the deposit of customer. One example of it …..after partition when major parts of PNB has gone in Pakistan govt/bank has settled full claim of customers.

  5. What about small finance banks which are
    Scheduled banks offering higher rate of interest, also having insurance coverage upto rs.5 lacs per individual per Bank

  6. PPF – Public Provident Fund is better than Bank FD as…(1) Interest in PPF is higher than Bank FD…(2) No TDS.. (3) You can invest Rs 1.5 lakhs each per annum for Self, Wife , Children….(4) Withdrawl allowed after 3 – years

  7. ICICI is not safe. I had FDs in ICICI, when matured, a person sitting in Trichy main branch brainwashed me to invest in ICICI Prudential Life Elite. He never disclosed anything like fee or charges going to be taken, locking period our money locked, at last return with less than our investment. He hide all those risks in order to get our money. His aim was to grab money from customers who have FDs in ICICI. Once we give our check and sign in Direct Deposit form, ICICIPrudential swaps our money and will send a booklet with our signature attached at the end of the book and listing lots of charges taken, and they invested our money in Share Market. Mentioned on it, if we don’t want to continue, we have to inform them within 15 days. Though you go to the same branch and inform that person, they will not answer properly or give false promise that they will inform to Mumbai office. That is it, you are trapped, going to lose your money, peace of mind. If you continue paying your premium, at last you will get your money with very very less interest or you will get less than what you invested. You money is on their hand, and they give you lot of reasons for the money they scammed. This is the technique ICICI Prudential Life is doing to the public, which totally a scam. I invested 6 lakhs and got 3.7 lakhs after 5 years. Also another one invested 4 lakhs and got 4.17 lakhs.

  8. Why just the said three banks which include two Private banks? Public sector banks are definitely safer to bank upon.

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