Which Bank Is Best For Fixed Deposit in India in 2024?

Fixed deposits are considered to be one of the safest options of investments available in India. With high and guaranteed interest rates, the minimal risk involved, and tax benefits up to Rs. 1,50,000, Fixed Deposit accounts are available in almost all banks and financial institutions. The interest rate paid on fixed deposits is based on the principal amount and the tenure of the deposit. Fixed deposits are also called term deposits and the interest rate on these deposits is guaranteed for the term.  

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Best Fixed Deposit Rates of Top Banks for Below Rs. 2 Crores

Here is a list of top Indian banks that offer interest rates for a tenure of 7 days to 10 years:

Banks General Citizens FD Rates Senior Citizens FD Rates
Axis Bank FD 2.50% - 5.75% 2.50% - 6.50%
Bank of Baroda FD 2.80% - 5.25% 3.30% - 6.25%
Bank of India FD 2.85% - 5.05% 3.35% - 5.55%
Canara Bank FD 2.90% - 5.25% 2.90% - 5.75%
HDFC Bank FD 2.50% - 5.50% 3.00% - 6.25%
IDFC Bank FD 2.50% - 5.25% 3.00% - 5.75%
Punjab and Sind Bank FD 3.00% - 5.30% 3.50% - 5.80%
Punjab National Bank FD 2.90% - 5.25% 3.50% - 5.75%
State Bank of India FD 2.90% - 5.40% 3.40% - 6.20%
Yes Bank FD 3.25% - 6.50% 3.75% - 7.25%

Disclaimer: Policybazaar does not endorse, rate, or recommend any particular company or product. The investment risk in the investment portfolio is borne by the policyholder.

Best 5 Year Fixed Deposit Interest Rates

Banks General Citizens FD Rates Senior Citizens FD Rates
Axis Bank 5.40% 6.05%
Canara Bank 5.25% 5.75%
IDFC First Bank 5.20% 5.70%
State Bank of India 5.30% 5.80%
Union Bank of India 5.40% 5.90%

Disclaimer: Policybazaar does not endorse, rate, or recommend any particular company or product. The investment risk in the investment portfolio is borne by the policyholder.

Best 3 Year Fixed Deposit Interest Rates

Banks General Citizens FD Rates Senior Citizens FD Rates
Axis Bank 5.40% 5.90%
IDFC First Bank 5.00% 5.00%
Punjab and Sind Bank 5.15% 5.65%
State Bank of India 5.10% 5.60%
Disclaimer: Policybazaar does not endorse, rate, or recommend any particular company or product. The investment risk in the investment portfolio is borne by the policyholder.

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
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*For annual premium upto ₹5 Lacs

Best 1 Year Fixed Deposit Interest Rates

Banks General Citizens FD Rates Senior Citizens FD Rates
Bank of India 4.35% 4.85%
Canara Bank 4.40% 4.90%
IDFC First Bank 4.50% 5.00%
Punjab and Sind Bank 4.50% 5.00%
Punjab National Bank 4.40% 4.90%
State Bank of India 4.40% 4.90%
Disclaimer: Policybazaar does not endorse, rate, or recommend any particular company or product. The investment risk in the investment portfolio is borne by the policyholder.

Fixed Deposits at a Higher Interest Rate

There are Non-Banking Financial Institutions (NBFCs) to obtain higher interest rates on fixed deposits. The following companies offer attractive interest rates on fixed deposits:

Banks Tenure General Citizens FD Rates Senior Citizens FD Rates
LIC Housing Finance FD 12 months to 60 months 5.25% to 5.75% 5.50% to 6.00%
PNB Housing Finance FD 12 months to 120 months 5.90% to 6.70% 6.15% to 6.95%
Shriram City Union Finance FD 12 months to 60 months 6.50% to 9.05% 6.80% t
Disclaimer: Policybazaar does not endorse, rate, or recommend any particular company or product. The investment risk in the investment portfolio is borne by the policyholder.
FD interest rates India have fallen consistently over the last 12 years.
Invest in Plans that offer Guaranteed Returns for over 25 Years

Best Tax Saver Fixed Deposit Interest Rates

Tax saver Fixed Deposits offer tax exemption up to a maximum of Rs. 1,50,000 under Section 80C of the Income Tax Act, 1961. It is important to note that tax exemption is available only after the completion of the 5-year lock-in period. 

Banks General Citizens FD Rates Senior Citizens FD Rates
Axis Bank Tax Saving FD 5.40% 6.05%
Bank of Baroda Tax Saving FD 5.25% 5.75%
Canara Bank Tax Saving FD 5.50% 6.00%
HDFC Bank Tax Saving FD 5.35% 5.85%
IDFC Bank Tax Saving FD 5.25% 5.75%
IDFC First Bank 5.25% 5.75%
IndusInd Bank Tax Saver Scheme 6.00% 6.50%
PNB Tax Saving FD 5.25% 5.75%
Punjab and Sind Bank 5.30% 5.80%
SBI Bank Tax Saving FD 5.30% 5.80%
Union Bank of India Tax Saving FD 5.40% 5.90%

Disclaimer: Policybazaar does not endorse, rate, or recommend any particular company or product. The investment risk in the investment portfolio is borne by the policyholder.

fd return beater

Tax-Saver Fixed Deposits Details

You can subscribe to the best tax-saving fixed deposits from reputed public and private banks in India.

The following banks offer attractive interest rates as well as flexibility:

  1. Axis Bank

    The bank offers fixed deposits under reinvestment or quarterly compounding basis. The lock-in period for fixed deposits is 5 years at 5.40% per annum and senior citizens will earn a 6.05% interest rate on fixed deposits.

  2. Bank of Baroda

    Bank of Baroda tax saver fixed deposits offer individuals and Hindu Undivided Families (HUFs) tax exemption benefits on the interest earned on the deposits. The computation of interest is made on a quarterly basis. The minimum deposit made under the FD account is Rs. 10,000 whereas the maximum deposit has no limit. An additional 0.50% interest rate is applicable for senior citizens.

  3. Canara Bank

    Canara Bank tax saver FD scheme comes with a minimum lock-in period of 5 years in order to avail of the tax exemption. While tax is applied to the interest income, the interest amount can be either paid quarterly or monthly as per the account holder’s preference. The loan facility is not available under the tax saver scheme of Canara Bank.

  4. HDFC Bank

    The bank offers tax-saving fixed deposits at 5.50% per annum for general citizens and at 6.25% per annum for senior citizens. The minimum investment is Rs. 100 whereas the maximum investment has no limit. There is a lock-in period of 5 years to avail of tax saver benefits in HDFC Bank. The interest is compounded annually on the deposits made.

  5. IDFC Bank

    IDFC tax saver FD scheme offers tax redemption up to Rs. 1,50,000 under Section 8-C of the Income Tax Act. To avail of the tax benefits, the account holder has to have a minimum lock-in period of 5 years. IDFC Bank does not offer any premature withdrawals under the FD tax saver scheme.

  6. IndusInd Bank

    IndusInd Bank offers an interest rate of 6.50% per annum to general citizens and 7.00% per annum to senior citizens under their tax saver scheme. A maximum of 1.5 lakhs can be exempted according to section 80C of the Income Tax Act.

  7. Punjab National Bank (PNB)

    A secure and flexible tax saver scheme that also offers a loan facility up to 90% on the deposited amount. Unlike many other tax saver schemes by different banks, PNB is beneficial as it also offers nomination facilities to its customers. Tax exemption up to Rs. 1,50,000 is provided under section 80C.

  8. Punjab and Sindh Bank

    Punjab and Sindh bank offers a tax saver FD scheme for a 5-year lock-in period. It offers an interest rate of 5.30% per annum for general citizens and 5.80% per annum for their senior citizen customers.

  9. State Bank of India

    SBI offers tax-saving fixed deposits with a lock-in period of 5 years. You can invest up to Rs. 1.5 lakh to get exemption from the income tax under Section 80C. The minimum deposit is Rs. 1,000 and the maximum deposit is Rs. 1,50,000. You can deposit the amount in multiples of Rs. 1,000. The bank pays 0.5% additional interest for senior citizens. The staff and pensioners of SBI will get an additional 1% interest rate.

  10. Union Bank of India

    Union Bank of India offers tax redemption under Section 80C of the Income Tax Act, 1961. Interest can be deposited on a monthly or quarterly basis and it also holds a minimum lock-in period of 5-years in order to avail of tax benefits. Minimum deposited amount id Rs. 5,000 whereas maximum has no limit. Union Bank of India also offers a nomination facility to their customers.

Guaranteed return plan Guaranteed return plan

An individual can easily calculate the maturity value of a Fixed Deposit with the help of FD Calculators provided by respective financial institutions. Generally, bank FD Rates range from 1.85% per annum to 6.95% per annum. Let’s discuss different FD rates for different banks and help an investor take a better decision.

Fixed Deposits Basic Details

Irrespective of the bank or any other financial institution offering a fixed deposit account to an entity, here are some basic details related to all when it comes to Fixed deposits (FDs):

Parameters Details
Rate of Interest 1.85% to 6.95% per annum (varies from bank to bank)
Deposit Amount (Minimum) Rs.1,000 (varies from bank to bank completely)
Investment Tenure 7 days to 10 years
Interest Compound Frequency Annually, Quarterly, or Monthly (varies from one bank to another)
Partial Withdrawals Available with a penalty (depending on banks)
Premature Closure Available with a penalty (depending on banks)

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Why Fixed Deposits?

Fixed deposit (FD) is a financial instrument offered by banks and financial institutions. The interest rate on fixed deposits is higher than the savings account. The fixed interest rate will be paid by the bank as per the agreement for the term chosen by the depositor. Fixed deposits are also called term deposits and they are very popular in India.

Employees, farmers, workers, professionals, and all kinds of businesspeople invest in fixed deposits as they are safe and secure. As a matter of fact, banks will guarantee a fixed deposit of a customer up to Rs. 1 lakh by buying an insurance policy as per the guidelines of the RBI (Reserve Bank of India).

Tenure of Fixed Deposits

The tenure of fixed deposits ranges from 7 days to 10 years. Instead of parking funds in a savings account, you can transfer the funds to a fixed deposit scheme so that you can earn a higher interest rate.

There is a trade-off between fixed deposits and savings deposits. The interest earned on savings deposit is exempted from income tax up to Rs. 10,000 per financial year. The interest earned on fixed deposits should be added to other sources of income and the income tax should be paid as per the tax slab.

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*Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Fixed Deposit Benefits

Fixed deposits can be made for a predetermined tenure at a fixed rate of interest.  Part of your investment portfolio can be in the form of fixed deposits so that there will be a great convenience.

  • Liquidity - Unless you opt for tax-savings fixed deposits, you can close the fixed deposit before the maturity period. If you opt for a tax-saving fixed deposit, you will not be able to close the account before 5 years.

  • Financial Goals - You can set financial goals and those goals can be reached by buying fixed deposits. The fixed deposits can be used to fulfill the child’s educational needs.

  • Automatic Renewal - The fixed deposit can be renewed automatically after the maturity date. You will not lose interest by exercising the auto-renewal facility.

  • Partial Withdrawal - Fixed deposits can be withdrawn partially to fulfill your financial needs. For example, you can break a fixed deposit made with Axis bank by closing the entire account. Hence, the remnant of the deposit will earn the interest rate without any issues.

  • Loan on Fixed Deposits - Banks offer fixed deposits with a loan facility. You can take a loan to the extent of 90% of the principal amount. The interest rate on the loan will be very low compared to other kinds of loans offered by the bank.

  • Secure Deposits - You can open a fixed deposit online or offline. The deposits are safe and secure. If you open a fixed deposit online, the deposit can be closed online.

  • Mobile Banking - You can download the mobile banking app of your bank and various kinds of online transactions including fixed deposits can be created very easily.

  • Transparent Process - The fixed deposits are created in a transparent manner. There are no indirect costs involved in the creation or maintenance of records. Unlike mutual funds, your principal amount is secure and the interest rate will be paid by the bank as per the agreement.

Eligibility for Fixed Deposit Investment

  • Individuals and HUF (Hindu Undivided Families) can invest in fixed deposits

  • Loans on Fixed Deposits - There is no loan provision for fixed deposits with a lock-in period of 5-years.

  • Term Deposits at Post Office - You can buy term deposits with post offices which are similar to fixed deposits offered by banks. There are tax-savings fixed deposits that can be opened at any post office in India. If you make a fixed deposit at one branch, it can be transferred to another branch in the postal department.

  • Joint Account - Tax-saving fixed deposit can be opened jointly at a post office. The tax benefits are applicable to the primary account holder.

  • TDS on Fixed Deposits - Banks will deduct TDS (Tax Deduction at Source) as per the income tax slab of the applicant. The customer should declare the annual income in the designated column of the application form. If the interest earned on fixed deposits in one year is higher than Rs. 10,000 banks will apply TDS automatically. However, there is an exemption for senior citizens where the interest income on fixed deposits is less than Rs. 50,000 per annum.

  • Higher Interest Rates for Senior Citizens - Senior citizens will earn a higher interest rate on fixed deposits.

Conclusion

Fixed deposits can be opened with banks or NBFCs at your convenience. Most of the banks offer online fixed deposit creation facilities. There is a marginal difference between the interest rates of various banks. Customers can create fixed deposits at a bank of their choice and tenure either online or offline.

Fixed Deposits are considered to be one of the safest and most-trusted forms of investment and hence if you are looking for decent returns with minimum or no risk involved, the FDs are the best kind of investment.

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*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
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