Sundaram Finance FD Rates Hiked From 16 October 2026: Seniors Get Up to 8% on 3-Year Deposits

New Sundaram Finance FD rates apply to deposits placed or renewed from 16 October 2026, and money already deposited keeps its old rate until maturity. That one rule shapes what you should do this week. Sundaram Finance, a deposit-taking NBFC based in Chennai, has raised rates by 25 to 30 basis points across its one-, two- and three-year deposits, taking the senior citizen rate on a three-year cumulative deposit to 8.00% at annual rests. Here are the new rates, what they are worth on ₹1 lakh, and how they compare with earlier hikes this month.

Sundaram Finance FD rates: cumulative deposits

Rates at annual rests. Old rates effective 1 August 2026; new rates effective 16 October 2026. Seniors are depositors who have completed 60 years on the date of deposit or renewal. Source: Sundaram Finance deposits page, read 15 October 2026.

The company also states effective yields for cumulative deposits. At the new rates, the effective yield on a three-year deposit is 8.08% a year for others and 8.66% for seniors, against 7.79% and 8.37% earlier.

Monthly and quarterly income rates

If you want regular interest instead of a lump sum at maturity, the rates are slightly lower because interest is paid out rather than compounded.

New rates from 16 October 2026. Quarterly interest is paid in March, June, September and December.

What the hike is worth on ₹1 lakh

Our calculation, compounding once a year and before tax. The 25 basis point increase adds about ₹865 over three years on ₹1 lakh for a regular depositor. The maturity values match the company’s stated effective yields of 8.08% and 8.66%.

Timing: deposit now or on 16 October?

Because the new rates apply from 16 October, a deposit placed on 15 October gets the old rate. If your deposit matures around now, a renewal processed from 16 October gets the higher rate. The company asks for renewal forms 14 days before maturity, and deposits can also be renewed online, so check the date your renewal will actually be processed.

Existing deposits do not change. If you lock in at 7.25% on 1 September, you stay at 7.25% until maturity. Breaking an existing deposit to rebook it at the new rate is rarely worthwhile: deposits cannot be withdrawn in the first three months, and premature withdrawals after that usually earn a lower rate.

Cumulative or income option?

The two options pay the same underlying rate in different ways.

• Cumulative: interest is added to your deposit every year and paid with the principal at maturity. This gives the highest final amount and suits money you will not need for one to three years.
• Monthly or quarterly income: interest is paid out regularly, so the stated rate is a little lower. This suits retirees who use the interest for expenses.

Tax works similarly in both: interest is generally taxed year by year as it accrues, even in the cumulative option, and is added to your income at your slab rate. Declaring it annually avoids a large lump of income in the maturity year; check with a tax adviser if you are unsure.

Key Sundaram Finance FD rules

• Minimum deposit: ₹10,000 for both fixed (income) and cumulative schemes.
• Lock-in: under RBI directions, no withdrawal is allowed within three months of deposit or renewal.
• Premature withdrawal: after three months but before six, no interest is paid; after six months, interest is 2% lower than the rate for the period the deposit has run, according to the company’s terms.
• Loan against deposit: up to 75% of the deposit, after three months, at 2% a year above the deposit rate, at the company’s discretion. No loans against NRI deposits.
• Joint deposits: up to two individuals, in “Anyone or Survivor” or “Number One or Survivor” mode.
• Tax: the company says TDS applies if annual interest exceeds ₹10,000, and that eligible depositors can submit Form 121 to avoid deduction. NRI deposits are taxed at 31.2%, with interest credited to an NRO account.

Company FD vs bank FD: know the difference

A company deposit with an NBFC is not a bank deposit. It is not covered by DICGC deposit insurance, which protects bank deposits up to ₹5 lakh per depositor per bank; see our DICGC guide. Safety depends on the company’s financial strength, so check its current credit rating before investing (the company says its deposits have been rated AAA for 30 years; confirm the latest rating with the rating agency), and keep each deposit to an amount you are comfortable with. Our NBFC FD safety checklist covers what to look at.

Part of a wider trend

This follows similar NBFC deposit hikes earlier this month, covered in our report on Shriram and Bajaj FD rate hikes. Since the RBI raised the repo rate on 7 October, lenders have been revising both loan and deposit rates. Nobody can predict how far rates will rise, so rather than waiting for the peak, spread money across tenors; see how an FD ladder works.

Before you invest, check these quick answers.

FAQs

What is the highest Sundaram Finance FD rate now?

8.00% at annual rests for senior citizens on a 36-month cumulative deposit, from 16 October 2026.

Will my existing Sundaram Finance deposit get the new rate?

No. The company says rates on existing deposits remain unchanged until maturity.

How much do I need to start?

The minimum is ₹10,000 per deposit, by cheque, demand draft, RTGS or NEFT.

Is a Sundaram Finance FD insured?

No. DICGC insurance covers bank deposits only, not NBFC deposits.

Can a minor have a deposit?

Yes. The company accepts deposits in a minor’s name through a natural or legal guardian, who signs the form and receives all communication.

Can I withdraw early?

Not within three months. After that, premature withdrawal is allowed under RBI directions and company terms, usually at a lower rate.

Takeaway: Sundaram Finance FD rates rise by 25–30 basis points from 16 October 2026, with seniors getting up to 8.00% on three-year cumulative deposits. Only new deposits and renewals gain; remember it is an uninsured NBFC deposit, so check the rating and limit your exposure.