Last Updated: July 1, 2026 | Rates compiled from official bank sources. FD rates in Sri Lanka are declining as CBSL reduces policy rates. Always verify current rates directly with banks before investing.
Current FD Rates Overview
Fixed deposits remain one of the safest investment options in Sri Lanka. Here's a comprehensive comparison of current rates.
Top FD Rates (July 2026)
| Bank | 1 Year | 2 Years | 3 Years | Special |
|---|---|---|---|---|
| Sampath Bank | 11.50% | 11.25% | 11.00% | 12.00% (Senior) |
| Commercial Bank | 11.25% | 11.00% | 10.75% | 11.75% (Senior) |
| HNB | 11.00% | 10.75% | 10.50% | 11.50% (Senior) |
| BOC | 10.75% | 10.50% | 10.25% | 11.25% (Senior) |
| People's Bank | 10.50% | 10.25% | 10.00% | 11.00% (Senior) |
| NDB | 11.50% | 11.25% | 11.00% | 12.00% (Senior) |
| DFCC | 11.75% | 11.50% | 11.25% | 12.25% (Senior) |
| Seylan Bank | 11.25% | 11.00% | 10.75% | 11.75% (Senior) |
Note: Rates change frequently. Verify with banks before investing.
Understanding FD Interest
How Interest is Calculated
Simple Interest Formula:
Interest = Principal × Rate × TimeExample: Rs. 1,000,000 at 11% for 1 year
Interest = 1,000,000 × 0.11 × 1 = Rs. 110,000Interest Payment Options
| Option | How It Works | Best For |
|---|---|---|
| Maturity | Interest paid at end | Maximum compounding |
| Monthly | Interest paid monthly | Regular income |
| Quarterly | Interest paid quarterly | Balanced approach |
| Annual | Interest paid yearly | Medium-term planning |
Tax on FD Interest
Withholding Tax (WHT)
Banks deduct 5% WHT on interest payments.
Example Calculation:
| Item | Amount |
|---|---|
| Gross Interest | Rs. 110,000 |
| WHT (5%) | Rs. 5,500 |
| Net Interest | Rs. 104,500 |
Is WHT Your Final Tax?
| Your Situation | Tax Treatment |
|---|---|
| Total income < Rs. 1.8M | WHT is final tax |
| Total income > Rs. 1.8M | Interest added to income, WHT credited |
| Senior citizen exemption | May be exempt up to certain limits |
FD Comparison Calculator
Example: Rs. 2,000,000 Investment
| Bank | Rate | 1-Year Interest | After WHT |
|---|---|---|---|
| DFCC | 11.75% | Rs. 235,000 | Rs. 223,250 |
| NDB | 11.50% | Rs. 230,000 | Rs. 218,500 |
| Sampath | 11.50% | Rs. 230,000 | Rs. 218,500 |
| HNB | 11.00% | Rs. 220,000 | Rs. 209,000 |
| BOC | 10.75% | Rs. 215,000 | Rs. 204,250 |
Difference between highest and lowest: Rs. 19,000/year
Strategies to Maximize Returns
1. FD Laddering
Instead of one large FD, spread across multiple maturities:
| FD | Amount | Term | Rate | Maturity Date |
|---|---|---|---|---|
| FD 1 | Rs. 500,000 | 6 months | 10.50% | June 2026 |
| FD 2 | Rs. 500,000 | 12 months | 11.25% | Dec 2026 |
| FD 3 | Rs. 500,000 | 18 months | 11.00% | June 2027 |
| FD 4 | Rs. 500,000 | 24 months | 11.50% | Dec 2027 |
Benefits:
- Regular liquidity access
- Captures rate changes
- Reduces reinvestment risk
2. Senior Citizen Rates
If you're 55+ (or have eligible family member):
| Bank | Regular Rate | Senior Rate | Bonus |
|---|---|---|---|
| DFCC | 11.75% | 12.25% | +0.50% |
| Sampath | 11.50% | 12.00% | +0.50% |
| Commercial | 11.25% | 11.75% | +0.50% |
Extra Rs. 5,000 per million per year!
3. Promotional Rates
Banks offer special rates for:
- New customers
- Large deposits (Rs. 10M+)
- Special occasions (New Year, etc.)
- Online deposits
4. Negotiate Higher Rates
For deposits above Rs. 5 million, negotiate directly with the branch manager. You can often get 0.25-0.50% extra.
FD vs Other Investments
Risk-Return Comparison
| Investment | Expected Return | Risk Level | Liquidity |
|---|---|---|---|
| Fixed Deposit | 10-12% | Very Low | Low |
| Treasury Bills | 10-11% | Zero (Govt) | Medium |
| Unit Trusts | 8-15% | Medium | High |
| Stocks | -20% to +50% | High | High |
| Gold | Variable | Medium | Medium |
When FD Makes Sense
✅ Capital preservation is priority
✅ Need guaranteed returns
✅ Short to medium-term goals
✅ Risk-averse investor
✅ Emergency fund parking
When to Consider Alternatives
❌ Long-term wealth building (10+ years)
❌ Beating inflation long-term
❌ High growth objectives
❌ Already have emergency fund
Premature Withdrawal
Penalty Structure
| Time Held | Typical Penalty |
|---|---|
| < 3 months | No interest paid |
| 3-6 months | 50% of earned interest |
| 6-12 months | 25% of earned interest |
| > 12 months | 10% of earned interest |
Example: Breaking a 1-Year FD After 6 Months
| Scenario | Amount |
|---|---|
| Principal | Rs. 1,000,000 |
| Expected interest (6 months) | Rs. 55,000 |
| Penalty (25%) | Rs. 13,750 |
| Actual interest received | Rs. 41,250 |
Tip: Use FD laddering to avoid premature withdrawals.
How to Open an FD
Documents Required
- NIC (original + copy)
- Proof of address
- Source of funds (for large amounts)
- Tax identification number
Process
- Visit branch or use online banking
- Choose amount and tenure
- Select interest payment frequency
- Sign agreement and deposit funds
- Receive FD certificate (physical or digital)
Online FD Opening
Most banks now offer online FD opening:
- Commercial Bank (Combank app)
- HNB (HNB FIT app)
- Sampath Bank (Sampath Vishwa)
- BOC (SmartPay)
FD Renewal Tips
Auto-Renewal
| Setting | What Happens |
|---|---|
| Auto-renew principal + interest | Compounds automatically |
| Auto-renew principal only | Interest credited to savings |
| No auto-renewal | FD becomes savings account |
Best Practice
Set calendar reminders 1 week before maturity to:
- Check current rates
- Compare with other banks
- Decide renewal or transfer
Calculate Your FD Returns
Use our free calculator for exact figures:
Features:
- Compare multiple banks
- Include WHT deduction
- Monthly/quarterly payout options
- Laddering strategy simulator
Related Guides
Official Resources
- Central Bank Interest Rates: cbsl.gov.lk
- Deposit Insurance: SLDI
- Bank Comparisons: Individual bank websites
Frequently Asked Questions
"Which bank has the highest FD rate right now?"
Rates change weekly. Generally, private banks (DFCC, NDB, Sampath) offer slightly higher rates than state banks (BOC, People's). Always compare before depositing.
"Is my FD protected if the bank fails?"
Yes. The Sri Lanka Deposit Insurance Scheme protects deposits up to Rs. 1,100,000 per depositor per bank. For larger amounts, consider spreading across multiple banks.
"Can I get a loan against my FD?"
Yes. Most banks offer loans up to 90% of FD value at FD rate + 1-2%. This avoids breaking the FD and losing interest.
"Are online FD rates higher?"
Some banks offer 0.25-0.5% extra for FDs opened via mobile banking apps. Check your bank's digital channels.
Complete Savings: Related Guides
| Guide | What You'll Learn | Read Time |
|---|---|---|
| Unit Trust Investment Guide | Higher returns, higher risk | 16 min |
| Emergency Fund Guide | Where to park your safety net | 12 min |
| Budgeting Guide | Find money to save | 13 min |
| Retirement Planning | Long-term wealth building | 16 min |
Official Resources
- Central Bank of Sri Lanka: cbsl.gov.lk
- Deposit Insurance: SLDI Scheme
- Bank Rate Comparisons: bankrates.lk
Disclaimer
Interest rates change frequently and vary by bank and deposit amount. This guide reflects rates as of July 2026. Always verify current rates directly with banks before investing.
Last Updated: July 1, 2026
Sources:
- Official bank websites and rate sheets
- Central Bank of Sri Lanka
- Sri Lanka Deposit Insurance Scheme