How to Compare Fixed Deposit Rates in Sri Lanka
Choosing the right fixed deposit requires more than just picking the highest interest rate. This guide explains what to look for when comparing FD rates across Sri Lankan banks so you can make a confident, informed decision.
1. Interest Rate (p.a.)
The annual interest rate is the most visible factor, but it should not be the only one. A private bank offering 9.5% may look more attractive than a state bank at 8.5%, but the difference in safety, minimum deposit, and payout terms can change the picture significantly. Always compare rates for the exact same tenure - a 12-month rate at one bank cannot be directly compared to a 6-month rate at another.
2. Tenure
Sri Lankan banks offer FD tenures ranging from 1 month to 5 years. Generally, longer tenures offer higher rates. However, locking money for too long reduces flexibility. A 12-month FD is a popular middle ground - it offers competitive rates while freeing up your capital within a reasonable period. If you expect to need the funds, choose a shorter tenure even if the rate is slightly lower.
3. State Banks vs. Private Banks
State-owned banks - Bank of Ceylon (BOC), People's Bank, and National Savings Bank (NSB) - are backed by the Sri Lankan government. NSB specifically operates under a statutory guarantee under the NSB Act, making it the safest FD option in the country. Private commercial banks such as Commercial Bank, Sampath Bank, HNB, and Seylan Bank typically offer slightly higher rates but carry a marginally higher (though still low) risk profile. All licensed banks are covered by the Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDIS).
4. Minimum Deposit Requirement
Most banks have minimum deposit thresholds - typically LKR 1,000 to LKR 25,000 for standard FDs. Some special rate FDs require higher minimums. Make sure the product you are comparing is actually available for your investment amount.
5. Interest Payout Options
Banks typically offer several interest payout options: monthly, quarterly, or at maturity. If you need regular income, a monthly payout option is useful - but note that some banks offer a slightly lower rate for monthly payouts compared to maturity payouts. Always confirm the payout structure before opening the FD.
6. Advance Income Tax (AIT)
FD interest in Sri Lanka is subject to Advance Income Tax at 10%, deducted at source by the bank on interest paid on or after 1 April 2026. It replaced the earlier 5% withholding tax, so the deduction on your interest doubled. Every gross rate in the table above becomes nine tenths of itself in your hand: 10% advertised is 9% received.
If your assessable income for the year does not exceed Rs. 1,800,000, you can file a self-declaration with the bank and receive the interest without deduction. Our guide to AIT on FD interest explains the process, and the FD calculator shows net figures directly.
7. Premature Withdrawal Penalties
Breaking a fixed deposit before maturity usually results in a penalty - typically a reduction in the interest rate paid. Some banks charge a flat fee in addition. If there is any chance you may need to access the funds early, factor in the premature withdrawal policy before committing.
8. Using FDs as Loan Collateral
Most Sri Lankan banks allow you to take a loan against your fixed deposit - typically up to 90% of the deposit value - at a relatively low interest rate. This is a useful feature if you want to maintain your FD while accessing liquidity. Confirm this facility is available before placing a large deposit.
Tip: Use the comparison feature above to select up to 3 FDs side by side. This lets you directly compare interest earned and maturity value for the same principal amount across different banks and tenures.
Rates are updated regularly from publicly available bank information. Always verify current rates directly with the bank before making a deposit decision.