Quick answer: One-year fixed deposit rates at Sri Lankan banks range widely in October 2026. State banks pay around 7.25% (NSB, June 2026 tariff), while private banks such as Seylan and Commercial Bank pay about 10.00% at maturity. Licensed finance companies often offer 11.5–13.5%. For comparison, the Central Bank's market average for all fixed deposits (AWFDR) was 9.34% in August 2026, and for new fixed deposits (AWNFDR) 8.31%. The policy rate (OPR) has been 8.75% since the Central Bank raised it by one percentage point on 26 May 2026. Banks deduct 10% tax from interest. With headline inflation at 8.0% in September 2026, a deposit below about 9% leaves you with almost no real return after tax. Compare the rate for the same tenure and the same payout option, and check the date on the rate sheet.
LKCB1021The Central Bank benchmarks
| Benchmark | Latest value | Date |
|---|---|---|
| Overnight Policy Rate (OPR) | 8.75% (deposit facility 8.25%, lending facility 9.25%) | since 26 May 2026; held on 22 July and 30 September |
| Average Weighted Fixed Deposit Rate (AWFDR) | 9.34% | August 2026 (July: 9.20%) |
| Average Weighted New Fixed Deposit Rate (AWNFDR) | 8.31% | August 2026 (July: 8.83%) |
| Average Weighted Deposit Rate (AWDR) | 7.52% | August 2026 |
| Treasury bill yields, primary auctions | about 9.3% to 9.95% depending on tenor | mid-October 2026 |
| Average Weighted Prime Lending Rate (AWPR) | 11.11% | week ending 16 October 2026 |
| Headline inflation (CCPI) | 8.0% year on year | September 2026 |
Source: Central Bank of Sri Lanka, Weekly Economic Indicators of 16 October 2026. The AWFDR averages all fixed deposits a bank holds, including old ones opened at earlier rates. The AWNFDR shows only deposits opened in that month, so it tracks what banks are paying right now more closely. A year earlier the policy rate was 7.75% and one-year Treasury bill yields were about 8%. The May 2026 increase pushed bank deposit rates up through the third quarter. The new fixed deposit rate dipped in August as some banks trimmed their offers.
One-year rates at selected banks
| Institution | 12 months | 24 months | Rate sheet |
|---|---|---|---|
| National Savings Bank | 7.25% | 7.75% | tariff of 2 June 2026 |
| People's Bank | 8.50% | 9.40% | tariff of 9 June 2026 |
| Commercial Bank of Ceylon | 10.00% (10.25% online) | 11.00% (11.25% online) | October 2026 |
| Seylan Bank | 10.00% (9.50% monthly interest) | 11.00% | tariff from 21 October 2026 |
| Central Finance (finance company) | 11.50% | 12.25% | from 17 July 2026 |
All rates are for interest paid at maturity unless stated otherwise. Banks change their rate boards often, sometimes every few weeks, and comparison websites lag behind them. In October 2026 some aggregators still showed Seylan's previous 12-month rate of 10.50%, and one listed People's Bank's two-year deposit at 5.00%, which is plainly an error. Always confirm the rate on the bank's own tariff on the day you deposit. Special tenures can pay more than the standard board. Bank of Ceylon, for example, runs 100- to 600-day plans, and Seylan pays more for five- and seven-month deposits of Rs. 500,000 or more. For a full table of fixed deposit rates by bank, see our fixed deposit rates in Sri Lanka.
Seylan's tariff, effective 21 October 2026, changed the picture for short money: five-month deposits of Rs. 2.0 million or more earn 11.25%, and seven-month deposits earn 11.50%. The bank also lifted its 60-month board to 13.00% at maturity for those balances. Bank of Ceylon's held special plans on 21 October 2026: 100 days at 8.00%, 300 days at 9.50%, 400 days at 10.00% and 600 days at 10.50%. People's Wealth, in force since 13 June 2026, pays 10.00% for two years.
The senior citizen scheme pays the higher of the bank's published rate or AWFDR plus 3.00%, on up to Rs. 1.0 million, so part of the return moves with the monthly benchmark rather than a fixed board. Licensed finance companies may pay senior depositors at most 50 basis points above ceilings on deposits of 12 months or more. Rates on special tenures are shown next to the standard board on our senior citizen fixed deposit page. Softlogic Finance, effective 1 October 2026, quoted 12.62% monthly for 12 months on senior deposits.
What the rate difference means for Rs. 1 million
Our own calculation for Rs. 1,000,000 deposited for 12 months, interest at maturity, with the 10% advance income tax deducted. At 7.25% you receive Rs. 65,250 net. At 8.50% you receive Rs. 76,500. At 10.00% you receive Rs. 90,000, and at the 10.25% online rate Rs. 92,250. The gap between the lowest and highest bank in this example is Rs. 27,000 a year. After tax, 7.25% becomes 6.5%, which is below September's 8.0% inflation, so the money loses purchasing power. A 10% deposit nets 9.0%, about one point above inflation. Treasury bills paid roughly 9.3–9.95% at the October auctions and carry no credit risk; our guide to investing in Treasury bills explains how individuals buy them.
How to compare offers properly
Compare like with like. A deposit that pays interest at maturity always shows a higher rate than the same deposit with monthly interest. At Seylan the gap is 10.00% against 9.50%, and at NSB 7.25% against 7.00%. If you want income every month, compare the monthly rates of each bank against each other. Ask for the annual effective rate (AER), which banks quote next to the nominal rate. It shows the yield once payout frequency is taken into account, so you can compare a monthly-interest deposit with one paid at maturity. Check the minimum deposit too. NSB starts at Rs. 1,000 and most private banks at Rs. 10,000, but monthly-interest and promotional tenures often need Rs. 25,000 or Rs. 500,000. Online deposits at banks such as Commercial Bank pay about 0.25 percentage points more than the branch board. Finally, read the early-withdrawal rule. Many banks pay no interest if you break a deposit within three months. After that, they recalculate the interest at the lower rate for the shorter period, minus a penalty. If monthly interest was already paid at the higher rate, the excess is taken back from your principal.
Higher rates and risk
Finance companies pay 1.5–3.5 points more than the big banks because they lend to riskier borrowers and have no state guarantee. LOLC Finance, at 9.00% for a year, is an exception closer to bank rates. Licensed banks and licensed finance companies are both members of the Sri Lanka Deposit Insurance Scheme. It covers up to Rs. 1,100,000 per depositor per institution, including accrued interest, and joint holders are covered separately. Above that amount your money is uninsured. When finance companies such as ETI Finance and The Finance Company failed, depositors with larger balances waited years for repayment. NSB deposits carry an explicit government guarantee under the NSB Act. A practical rule is to keep no more than Rs. 1.1 million in any one finance company, and to check the licence on the Central Bank's list of licensed institutions before you deposit. Never deposit with a company that is not on that list, however high its rate.
Tax and senior citizens
Banks and finance companies deduct 10% advance income tax from interest paid to residents. If your total income from all sources is Rs. 1.8 million a year or less, you can give the bank a self-declaration and receive interest without the deduction. A false declaration carries a penalty of up to Rs. 200,000. Interest on foreign currency accounts is not subject to this deduction. Depositors aged 60 and over usually get 0.25–1.00 percentage point more than the standard board, and the government's special senior citizen scheme pays a higher rate on up to Rs. 1 million. Current offers are compared on our page on senior citizen fixed deposit rates.
Before you commit, ask the branch for two documents: the dated tariff sheet and the senior citizen rate schedule, because the special tenures and the AWFDR-linked scheme are not always printed on the standard board. Confirm the minimum balance attached to any promotional rate, since Seylan's five- and seven-month offers are tiered and a shorter tenure can beat a one-year board. If you are 60 or over, ask whether your deposit qualifies for the government scheme and how the monthly payout is calculated, because that return moves with the benchmark instead of a fixed rate. Diary the maturity date, since the rate you are quoted today does not roll over automatically.