The Fixed Deposits or FDs of Banks are one of the most popular investment options so far. This investment option is not only the first choice of senior citizens who look after guaranteed income, but it is also the preferred choice of young investors who do not want to afford the risk. Despite satisfactory FD interest rates, it is suggested not to over-expose this investment option and one must assess his/her asset allocation and investment goals to know the amount one should invest in the FDs.Read more
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For example, saving for children higher education that maybe after 15 years from now through Fixed Deposit may not be a good idea because after tax-redemption interest rates provided on FD may not provide desired returns, however, if one wants to purchase an expensive gift for his/her child after two or three years, then FD can be helpful.
Since FD is a term deposit as one deposits his/her money for a fixed tenure or term in a bank, thus it is suggested to know the FD interest rates that different banks provide. To select an FD, one should compare the rate of interest that it offers. Mentioned below are the FD interest rates of up to Rs. 1 Crore of different banks for different tenures. We have taken bank FD interest rates as a benchmark for five years and above, which is 6.75%:
|Rate of Interest in % for FDs of Up to Rs.1 Crore|
|Six Months to < One Year||One Year to <Two Years||Two Years to < Three Years||Three Years to < Five Years||Five Years and Above|
|DCB Bank||5.25||5.30 to 5.50||5.50 to 5.95||5.95||5.95|
|IDFC Bank||3.50 to 4.75||5.75||6.00||6.25||6.00|
|Laxmi Vilas Bank||2.75 to 3.50||5.00 to 5.25||5.25||5.65||5.75|
|Yes Bank||4.75 to 5.00||5.75||6.00||6.25||6.25|
|RBL Bank||5.00 to 5.25||6.25||6.50||6.30||5.75|
|City Union Bank||3.50 to 4.75||5.00 to 5.25||5.00||5.00||5.00|
|Federal Bank||3.75 to 5.10||5.00 to 5.25||5.35||5.40||5.60|
|Axis Bank||3.50 to 4.40||5.10 to 5.25||5.40||5.40||5.75|
|ICICI Bank||3.50 to 4.40||5.00||5.20||5.45||5.60|
|IndusInd Bank||4.25 to 5.50||6.00||6.00||6.00||5.50|
|Karur Vysya Bank||3.75 to 4.25||5.15||5.25||5.40||5.60|
|South Indian Bank||3.80 to 4.50||4.90||5.25||5.50||5.50 to 5.65|
|Indian Overseas Bank||4.90||5.20||5.25||5.25||5.25|
|Tamilnad Mercantile Bank||4.75 to 5.00||5.25||5.35||5.00||5.00|
|Oriental Bank of Commerce||4.40 to 5.20||5.20||5.20||5.30||5.30|
*The FD rates are subject to change. Please check the website of the relevant bank for the latest FD rates.
One must know the below benefits of an FD account before opening it with a bank:
When Opening an FD Account: One can open an account of Fixed Deposit with a bank where he/she already has a savings account. However, some banks provide this facility of opening an FD account even without having a savings account with them. In this case, one has to undergo KYC (Know–Your–Customer) process when the bank allows opening an FD account without having savings account in it. For the same, one has to provide the self-attested photocopies of ID proof like PAN, Voter ID, address proof as Aadhar Card, passport, etc., and passport size colored photograph. One may need to show the original documents at the bank. These original documents are returned instantly after verification.
FD Tenure: The maximum and minimum tenure of FD can vary from bank to bank. Generally, a person can invest in Fixed Deposit for a minimum of seven days to a maximum of ten years. One can select the period for which he/she wants to keep the FD as per his/her requirement.
Maximum and Minimum Investment Amount: The minimum amount for which one can open an FD account is different for different banks. However, the maximum amount limit is not fixed for an FD for any bank.
Interest in FD: The FD interest rate is linked with the period for which one invests in FD and is also dependent on the bank. This is because one may find variation in the interest provided by different banks for the same tenure. For getting the payment of the interest one may either go for the cumulative or non-cumulative option. In the cumulative option, the interest amount accrued is re-invested and is paid when the FD matures along with the principal amount. With a non-cumulative option, interest is paid into the account of the depositor at the time of pay-out that is selected at the time of opening an FD account. Generally, the banks provide the option of selecting the FD interest rate on a quarterly, monthly, annually, or six-yearly basis.
Taxation: The FD interest rate received is completely taxable. The interest is taxed as per the rates of the Income Tax Slab of an investor. TDS is deducted if the payment of interest in one single year is more than Rs.10, 000 according to current laws of tax. For avoiding TDS one can provide Form 15G/ Form 15H to the bank.
The Facility of Loan: An FD can be used as collateral for getting a loan. The maximum amount of loan sanctioned is generally a specific percentage of the primary or principal deposited amount. This percentage can be different for different banks.
Premature Withdrawals: For any emergency, one can break his/her FD before its maturity date. However, a penalty is levied on premature withdrawals and it may vary from bank to bank.
The Facility of Nomination: One can make nominees of his/her FD account.
Automatic Renewal of FD: Most banks renew FD accounts for the same time frame automatically at their maturity. The automatic renewal occurs when no specific instructions are given to the bank.
Final Words: In this way, always remember the benefits of the FD account before opening or closing it with a bank. For convenience, we have provided the list of FD interest rates of the topmost banks. One can consider them before opening an FD account.