Types of Fixed Deposits and How to Choose a Suitable Fixed Deposit?

A fixed deposit is considered one of the safest investment options by Indians. The reason for the same in return for a fixed amount after a certain period. Moreover, it offers a comparatively more interest rate than a normal savings account. So, what exactly is a fixed deposit?

Read more
Best Investment Plans
  • Save upto ₹46,800 in tax under Sec 80C

  • Inbuilt Life Cover

  • Tax Free Returns Unlike FD+

Get Guaranteed returns upto 7.5%*
Invest in 100% Guaranteed Return Plans with Tax benefits under sec 80C & No Tax on returns*
+91
Secure
We don’t spam
View Plans
Please wait. We Are Processing..
Your personal information is secure with us
Plans available only for people of Indian origin By clicking on "View Plans" you agree to our Privacy Policy and Terms of use #For a 55 year on investment of 20Lacs Tax benefit is subject to changes in tax laws
Get Updates on WhatsApp
We are rated~
rating
6.7 Crore
Registered Consumers
51
Insurance Partners
3.4 Crore
Policies Sold

What is a Fixed Deposit?

Fixed deposits are also known as term deposits. They are a type of investment that lets you gain interest by depositing an amount for a fixed tenure. The rate of interest on FDs is predefined and fixed, but it depends on tenure. For example, SBI FD rates for the general public for a tenure of one year is 4.90%. For senior citizens, for the same tenure, SBI FD rates are 5.50%.

Generally, the fixed deposits have a lock-in period and as an investor of FD, you cannot withdraw money from it before completing this period. If for any reason, you have to withdraw money before the completion of the lock-in period, you have to pay a penalty on the rate of interest.

Comparison Between
Fixed Deposits, Guaranteed Return Plans & Debt Mutual Fund
Guaranteed Return Plans, Fixed Deposits &
Debt Mutual Fund
Guaranteed Return Plans
Returns Before Tax
7.5% (TAX-FREE)
Returns After Tax
7.5%
Guaranteed Returns
Yes
Life Cover
Yes
Tax on Profit
Tax Free*
Risk
No Risk
awards
Still Better than FD’s and Debt Mutual Fund
Fixed Deposits
Returns Before Tax
7% (TAXABLE)
Returns After Tax
4.8%
Guaranteed Returns
Yes
Life Cover
No
Tax on Profit
Taxable
Risk
Low Risk
Debt Mutual Fund
Returns Before Tax
8% (TAXABLE)
Returns After Tax
5.5%
Guaranteed Returns
No
Life Cover
No
Tax on Profit
Taxable
Risk
High Risk
VIEW PLANS
*For annual premium upto ₹5 Lacs

Types of Fixed Deposits:

There are different types of fixed deposit options provided by Indian banks. The common types of fixed deposits are:

  1. Standard Fixed Deposits:

    Almost all Indian banks offer this type of fixed deposit option to their customers. With a standard fixed deposit, you can invest your money for a fixed term and it offers you a fixed rate of interest that generally depends on the tenure of the deposit. Common features of Standard Fixed Deposit are:

    • The amount is deposited for a fixed term.

    • The term of deposit may range from seven days to 10 years.

    • The bank pre-defines the rate of interest.

    • The rate of interest you get in a Standard Fixed Deposit is higher than a savings account deposit.

  2. Tax-Saving Fixed Deposit:

    Tax-Saving Fixed Deposit is different than Standard Fixed Deposits in a way that you cannot invest your money in it for less than five years. The amount you invest in this type of FD is eligible for tax exemption U/S 80C of the Income Tax Act. However, the interest earned from this fixed deposit is eligible for tax. The features of this fixed deposit are:

    • The amount that is eligible for tax exemption under this fixed deposit scheme is Rs. 1,50,000 in one year.

    • Under this fixed deposit scheme, only lump-sum deposits are allowed.

    • These fixed deposits have a lock-in period of five years.

  3. Special Fixed Deposits:

    These fixed deposits are termed as ‘special’ as they are provided for a special or specific period. This special tenure can be anything such as 390 days or 290 days, etc. The rate of interest offered by these special fixed deposits is higher. This is the reason they are a popular choice among investors. The features of these fixed deposits are:

    • You have to invest in special FDs for a specific tenure.

    • You cannot withdraw your money for this specific tenure.

    • The rate of interest offered in Special Fixed Deposits is higher than Standard Fixed Deposits.

    fd return beater
  4. Cumulative Fixed Deposits:

    In cumulative fixed deposits, the interest is provided with the invested amount upon maturity of the FD. The features of this fixed deposit are as follows:

    • The interest is compounded annually, half-yearly, quarterly, monthly, bi-weekly, or weekly basis, and it is paid when the fixed deposit matures.

    • This deposit helps you to grow your invested amount.

  5. Non-Cumulative Fixed Deposit:

    The features of non-cumulative fixed deposit are as follows:

    • The interest is paid annually, half-yearly, quarterly, or monthly basis according to your choice.

    • This type of investment is better for pensioners who are looking out for a regular source of income.

  6. Senior Citizen’s Fixed Deposit:

    This fixed deposit is for senior citizens or for those who are more than 60 years old. The features of this fixed deposit are:

    • The senior citizens get an additional rate of interest on fixed deposits. This additional rate may range from 0.25% to .50% more than standard FD rates.

    • The term of senior citizen FDs are also flexible.

  7. Flexi Fixed Deposits:

    These fixed deposits are linked to your savings account. The basic features of this FD variant are:

    • Under this FD scheme, you can open an FD account with some initial deposit that can be of your choice and then link this account to your savings account.

    • You can as well apply a limit on your savings account and any excess to this limit can be transferred to your fixed deposit account.

FD interest rates India have fallen consistently over the last 12 years.
Invest in Plans that offer Guaranteed Returns for over 25 Years

How to Choose a Suitable Fixed Deposit

Which bank is the best for fixed deposit? Or what is the suitable type of fixed deposit for me? If these are some of your concerns, then do not worry as we are here discussing the points that you must consider before finalizing a fixed deposit. Keeping these points in your mind, you can choose a suitable fixed deposit:

  • Tenure of the Fixed Deposit: The rate of interest on FD very with tenure. This means for different tenures; the FD interest rates are different. Most of the time, the fixed deposits with longer tenures have higher interest rates. However, long tenures lock-in your money for that period, and, thus it compromises the option of liquidity. So, if you want to invest your money to fulfill your short-term goals, it is recommended to invest for short tenure FD. The tenure of fixed deposits varies from seven days to 10 years and you can select as per your requirement. So, it is recommended to opt for a bank that offers flexibility in tenures.

    Guaranteed return plan Guaranteed return plan
  • Premature Withdrawal: Before opting for a fixed deposit account with a bank, it is advised to check for the terms and conditions of premature withdrawal. Generally, the banks provide the clauses for premature withdrawal on their website. Most of the banks deduct penalty on premature withdrawal from FD and give you an option for liquidity.

  • Rate of Interest: The rate of interest offered on fixed deposit is one of the most important factors to consider. Higher the rate of interest greater the returns from FD. So, you can opt for a bank that offers a higher rate of interest on fixed deposits.

  • Additional Advantages: With interest rates, the banks also provide many other benefits like the facility of loan against your FD account. Some banks as well offer the feature of auto-renewal and the facility of overdraft for high liquidity of the deposited funds.

The Final Words!

Despite the countless options of investments available in India, people prefer fixed deposits. The reasons for the popularity of fixed deposits are safety, security, and steady growth of your invested amount. Upon completion of the tenure of FD, the bank pays back the invested amount along with interest. The different types of fixed deposits offered by banks allow you to opt for a suitable FD option.

Allahabad Bank FD Interest Rates

Allahabad Bank FD Interest Rates

Andhra Bank FD Interest Rates

Andhra Bank FD Interest Rates

Assam Gramin Vikash Bank FD Interest Rates

Assam Gramin Vikash Bank FD Interest Rates

AU Small Finance Bank FD Interest Rates

AU Small Finance Bank FD Interest Rates

Axis Bank FD Rates

Axis Bank FD Rates

Bajaj Finance FD Interest Rates

Bajaj Finance FD Interest Rates

Bandhan Bank FD Interest Rates

Bandhan Bank FD Interest Rates

Bangiya Gramin Vikash Bank FD Interest Rates

Bangiya Gramin Vikash Bank FD Interest Rates

Bank of Baroda FD Interest Rates

Bank of Baroda FD Interest Rates

Bank of Ceylon FD Interest Rates

Bank of Ceylon FD Interest Rates

Bank of India FD Interest Rates

Bank of India FD Interest Rates

Bank of Maharashtra FD Interest Rates

Bank of Maharashtra FD Interest Rates

Baroda Gujarat Gramin Bank FD Interest Rates

Baroda Gujarat Gramin Bank FD Interest Rates

Canara Bank FD Interest Rates

Canara Bank FD Interest Rates

Capital Small Finance Bank FD Interest Rates

Capital Small Finance Bank FD Interest Rates

Central Bank of India FD Interest Rates

Central Bank of India FD Interest Rates

Citibank FD Interest Rates

Citibank FD Interest Rates

City Union Bank FD Interest Rates

City Union Bank FD Interest Rates

Corporation Bank FD Interest Rates

Corporation Bank FD Interest Rates

Dakshin Bihar Gramin Bank FD Interest Rates

Dakshin Bihar Gramin Bank FD Interest Rates

DBS Bank FD Interest Rates

DBS Bank FD Interest Rates

Dena Bank FD Interest Rates

Dena Bank FD Interest Rates

Dhanlaxmi Bank FD Interest Rates

Dhanlaxmi Bank FD Interest Rates

Equitas Small Finance Bank FD Interest Rates

Equitas Small Finance Bank FD Interest Rates

ESAF Small Finance Bank FD Interest Rates

ESAF Small Finance Bank FD Interest Rates

HDFC Bank FD Interest Rates

HDFC Bank FD Interest Rates

HSBC FD Interest Rates

HSBC FD Interest Rates

ICICI Bank FD Interest Rates

ICICI Bank FD Interest Rates

IDBI Bank FD Interest Rates

IDBI Bank FD Interest Rates

IDFC First Bank FD Interest Rates

IDFC First Bank FD Interest Rates

Indian Bank FD Interest Rates

Indian Bank FD Interest Rates

Indian Overseas Bank FD Interest Rates

Indian Overseas Bank FD Interest Rates

IndusInd Bank FD Interest Rates

IndusInd Bank FD Interest Rates

Jana Small Finance Bank FD Interest Rates

Jana Small Finance Bank FD Interest Rates

Karnataka Bank FD Interest Rates

Karnataka Bank FD Interest Rates

Kerala Gramin Bank FD Interest Rates

Kerala Gramin Bank FD Interest Rates

Kotak Mahindra Bank FD Interest Rates

Kotak Mahindra Bank FD Interest Rates

Lakshmi Vilas Bank FD Interest Rates

Lakshmi Vilas Bank FD Interest Rates

Muthoot Capital

Muthoot Capital

Nainital Bank FD Interest Rates

Nainital Bank FD Interest Rates

Odisha Gramya Bank FD Interest Rates

Odisha Gramya Bank FD Interest Rates

Paschim Banga Gramin Bank FD Interest Rates

Paschim Banga Gramin Bank FD Interest Rates

Paytm Payments Bank FD Interest Rates

Paytm Payments Bank FD Interest Rates

PNB FD Interest Rates

PNB FD Interest Rates

Prathama UP Gramin Bank FD Interest Rates

Prathama UP Gramin Bank FD Interest Rates

RBL Bank FD Rates

RBL Bank FD Rates

Saurashtra Gramin Bank FD Interest Rates

Saurashtra Gramin Bank FD Interest Rates

SBI FD Interest Rates

SBI FD Interest Rates

Shriram Finance FD Interest Rates

Shriram Finance FD Interest Rates

State Bank of Hyderabad FD Interest Rates

State Bank of Hyderabad FD Interest Rates

State Bank of Mysore FD Interest Rates

State Bank of Mysore FD Interest Rates

State Bank of Travancore FD Interest Rates

State Bank of Travancore FD Interest Rates

Syndicate Bank FD Interest Rates

Syndicate Bank FD Interest Rates

Tamil Nadu Grama Bank FD Interest Rates

Tamil Nadu Grama Bank FD Interest Rates

Telangana Grameena Bank FD Interest Rates

Telangana Grameena Bank FD Interest Rates

Tripura Gramin Bank FD Interest Rates

Tripura Gramin Bank FD Interest Rates

UCO Bank FD Interest Rates

UCO Bank FD Interest Rates

Ujjivan Small Finance Bank FD Interest Rates

Ujjivan Small Finance Bank FD Interest Rates

Union Bank of India FD Interest Rates

Union Bank of India FD Interest Rates

Uttar Bihar Gramin Bank FD Interest Rates

Uttar Bihar Gramin Bank FD Interest Rates

Uttarakhand Gramin Bank FD Interest Rates

Uttarakhand Gramin Bank FD Interest Rates

Vijaya Bank FD Interest Rates

Vijaya Bank FD Interest Rates

Yes Bank FD Interest Rates

Yes Bank FD Interest Rates

Expand

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
+ Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
#Discount offered by insurance company
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

FD Calculator

Total Investment

₹500 ₹30L
Enter Total Investment

Rate of Interest (Yearly)

1% 15%
Rate of Interest (Yearly)

Time Period

1 Year 15 Years
Enter Time Period
Interest Earned
Maturity Amount

FD Rates articles

Recent Articles
Popular Articles
BOI Current Deposits Plus Scheme

10 Jun 2024

The BOI Current Deposits Plus Scheme is a unique option for
Read more
BOI Capital Gains Account Scheme

10 Jun 2024

The Capital Gains Account Scheme, 1988, offered by the Bank of
Read more
BOI Star Flexi Recurring Deposit

10 Jun 2024

The BOI Star Flexi Recurring Deposit, offered by the Bank of
Read more
BOI MACAD - Star Motor Accidental Claimant Annuity Deposit

10 Jun 2024

BOI MACAD is a scheme by the Bank of India to handle
Read more
Bank Of India Super Special Deposit Account - Star Super Special Deposit Account

10 Jun 2024

The BOI Super Special Deposit Account, also known as the Star
Read more
Application for Withdrawal of Fixed Deposit
Fixed Deposits are the safest investment instruments. You invest the amount of your choice as the fixed deposit
Read more
Which Bank has the Highest Interest Rate for Fixed Deposit?
The Small Finance Banks offer the highest FD interest rates for a tenure between 7 days to 10 years. Unity Small
Read more
SBI Fixed Deposit Monthly Income Scheme
Fixed deposits are the safest investment vehicles for Indian financial planners. You can open a fixed deposit
Read more
SBI Fixed Deposit Double Scheme
The SBI Fixed Deposit Double Scheme is named Special Term Deposit to cater to investors looking to double their
Read more
Nominee Vs Legal Heirs for Fixed Deposits
Fixed deposits are a popular investment option for individuals who wish to earn a stable rate of interest on
Read more

top
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL