FD Interest Rates
Fixed deposits in banks are a risk-free investment. In case of a bank fixed deposit, credit ratings are not required and FD interest rates offered are lower in comparison to FD’s of non-banks. The FD interest rates largely depend upon the amount that is deposited followed by the tenure of deposit and the sort of depositor.
With increase in FD interest rates, look for high safety of your deposit and begin your journey of investment and let your savings grow smoothly. Fixed deposits are a preferred choice as it offers guaranteed returns.
What Do You Understand by a Fixed Deposit?
A Fixed Deposit (FD) account is one of the most sought-after investment avenues in India. Provided by various banks and NBFCs, fixed deposits are quite popular among investors as it offers higher and secured returns. Fixed deposits are also known as 'term deposits' or 'time deposits'.
Fixed deposits are one of the most prominent conventional investment tools that come with multiple benefits. With different types of fixed deposit, people invest a fixed amount for a predetermined period, which is referred to as maturity tenure. On maturity, the financial institutions return the principal amount invested along with the interest earned throughout the FD tenure.
Fixed Deposit Interest Rates in India for Less Than 1 Year
|Kotak Mahindra Bank||181 days to 269 days||5.80%|
|State Bank Of India||180 days to 210 days||5.80%|
|ICICI Bank||61 days to 184 days||5.25%|
|Axis Bank||5 months to 6 months||5.40%|
|HDFC Bank||91 days to 6 months||5.40%|
|Bank of Baroda||91 days to 180 days||5.50%|
|IDFC Bank||91 days to 180 days||6.75%|
In FDs, people invest a fixed amount for a pre-determined period as maturity tenure. On maturity, the financial institutions returns the principal amount invested along with the interest earned throughout the FD tenure.
Best FD Interest Rates in India 2020
Below comparison table shows the different FD rates in India offered by various banks:
|Bank||FD Rate of Interest||Senior Citizen FD Rates|
|SBI Fixed Deposit||4.50% - 6.00%||5.00% - 6.50%|
|HDFC Bank Fixed Deposit||3.50% - 6.40%||4.00% - 6.90%|
|ICICI Bank Fixed Deposit||4.00% - 6.40%||4.50% - 6.90%|
|Axis Bank||3.50% - 6.65%||3.50% - 7.30%|
|Kotak Bank||3.50% - 6.25%||4.00% - 6.75%|
|IDFC First Bank||4.00% - 7.50%||4.50% - 8.00%|
|Bank of Baroda||4.50% - 6.25%||5.00% - 6.75%|
|Citibank||3.00% - 5.25%||3.50% - 5.75%|
|IDBI Bank||3.50% - 6.45%||4.00% - 6.95%|
|Indian Bank||4.50% - 6.30%||5.00% - 6.80%|
|Indian Overseas Bank||4.50% - 6.40%||5.25% - 7.15%|
|Punjab National Bank||4.50% - 6.30%||5.00% - 6.80%|
|PNB Housing Finance||8.00% - 8.15%||8.25% - 8.40%|
|Allahabad Bank||4.95% - 6.45%||4.95% - 6.45%|
|Andhra Bank||3.50% - 6.10%||4.00% - 6.60%|
|Bank of India||4.25% - 6.30%||4.75% - 6.80%|
|Bank of Maharashtra||4.25% - 6.00%||4.25% - 6.50%|
|Canara Bank||4.50% - 6.30%||5.00% - 6.80%|
|Central Bank of India||4.50% - 6.25%||5.00% - 6.75%|
|UCO Bank||4.50% - 6.30%||4.75% - 6.80%|
|Union Bank of India||5.00% - 6.45%||5.50% - 6.95%|
|United Bank of India||4.00% - 6.50%||4.00% - 6.50%|
|ESAF Small Finance Bank||5.50% - 8.00%||6.00% - 8.50%|
|IndusInd Bank||4.00% - 6.75%||4.50% - 7.25%|
|RBL Bank||5.00% - 7.45%||5.50% - 7.95%|
|HSBC Bank||3.00% - 6.00%||3.50% - 6.50%|
|DCB Bank||5.40% - 7.60%||5.90% - 8.10%|
|South Indian Bank||4.00% - 6.70%||4.50% - 7.20%|
|Bandhan Bank||3.50% - 6.95%||4.25% - 7.70%|
|Lakshmi Vilas Bank||4.50% - 7.80%||4.50% - 8.40%|
|Equitas Small Finance Bank||5.00% - 8.25%||5.60% - 8.85%|
|Jana Small Finance Bank||5.00% - 8.50%||5.60% - 9.10%|
|DHFL||8.50% - 9.25%||9.00% - 9.75%|
|Karnataka Bank||3.50% - 6.50%||4.00% - 7.00%|
|DBS Bank||4.00% - 6.50%||4.00% - 6.50%|
|Ujjivan Small Finance Bank||5.50% - 8.10%||6.00% - 8.60%|
|Fincare Small Finance Bank||4.00% - 9.00%||4.50% - 9.50%|
|Karur Vysya Bank||4.40% - 6.30%||4.40% - 6.80%|
|Yes Bank||5.00% - 7.50%||5.50% - 8.00%|
|Syndicate Bank||4.50% - 6.30%||5.00% - 6.80%|
|Standard Chartered Bank||4.25% - 6.60%||4.25% - 6.60%|
|Dhan Laxmi Bank||4.00% - 6.90%||4.50% - 7.40%|
|Bajaj Finserv||7.60% - 8.10%||7.85% - 8.35%|
|LIC Housing Finance||7.50% - 7.60%||7.75% - 7.85%|
|Federal Bank||3.50% - 6.60%||4.00% - 7.10%|
|AU Small Finance Bank||5.25% - 7.77%||5.75% - 8.27%|
|Corporation Bank||4.55% - 6.45%||5.05% - 6.95%|
*The FD interest rates mentioned in the above table are as of January 1st, 2020. The table does not represent any chronological order.
If we consider the above table, Lakshmi Vilas Bank offers the highest FD rate like 7.80% for an FD tenure of 450 days. These rates are subject to change as per the RBI rule, economic conditions, the level of credit demand or internal liquidity position of banks. Moreover, FD interest rates in India for various banks vary depending on the tenure of deposit or type of the depositor. Let’s say DHFL offers the best interest rates on Fixed Deposits at 9.25% for general people and 9.75% (maximum) for senior citizens. On the other hand, if we talk about company-owned FDs, NBFCs and HFCs offer the highest FD rates, without a risk. This will help you figure out which bank is the best for fixed deposit.
Let’s say DHFL offers the best interest rates on FD at 9.25% for general people and 9.75% (maximum) for senior citizens. On the other hand, if we talk about company-owned FDs, NBFCs and HFCs offer the highest FD rates, without a risk. This will help you figure out which bank is the best for fixed deposit.
Types of Fixed Deposit in India
Fixed deposits can be availed in below types:
With a Flexi FD, the depositor can link its fixed deposit account with a savings account. The deposited money moves between the savings account and the FD account. This type of FD is also popular as Sweep in- Sweep out fixed deposit. It helps you earn higher interests against your deposits.
Regular FDs are designed for a fixed tenure, which offers a higher rate of interest, depending on the FD tenure.
Tax Saving FD
Tax saving FD allows to claim tax benefits on interest earned from the FD deposits. With this account, the depositor can claim a deduction up to Rs. 1.5 lakh. The money deposited is fixed for a period of 5 years minimum, where pre-mature or partial withdrawal is not allowed; neither a loan can be applied.
Fixed Deposit Interest Rates for Senior Citizens
When it comes to investing their hard-earned money, senior citizens mostly prefer a fixed deposit account. The reason is the higher returns. Almost every leading financial institution in India offers attractive FD interest rates for senior citizens. The current fixed deposits rates on senior citizen FD deposits range from 4.5% to 9.5% from 7 days to 7 years.
The below mentioned are some of the benefits to be availed with senior citizen fixed deposit account:
- The minimum eligible age should be 60 years or more while initiating the investment
- The tenure of senior citizen FD is 7 to 10 years in most of the Indian banks
- Fixed deposit rates in India for senior citizens earn around 0.25% to 0.75% higher interest as compared to other FD deposit accounts
- Senior citizens can avail loan against their FD accounts
- Premature withdrawals are allowed, however, a nominal penalty is applicable depending on the amount to be withdrawn.
Tax-Saving Fixed Deposit Account: 10 Facts
As per Section 80C of the Income Tax Act, fixed deposit account holders can claim a tax deduction for investment(s) up to 1.5 Lakh Rupees in a tax-saving fixed deposit account. The invested amount is deducted from the gross total income to compute a person’s taxable income.
Here are 10 Things to know about a Tax-Saving Fixed Deposit Account:
- Who can invest Only HUFs and individuals can opt for tax- saving fixed deposit schemes.
- Minimum Amount -While a fixed deposit account can be opened in any bank, the minimum amount to be invested varies as per a bank’s terms and conditions.
- Lock-In Period - These fixed deposit schemes come with a lock-in period of five years. Loan against FDs and Pre-mature withdrawals are strictly not allowed.
- How to Invest - An individual can invest in tax saving FDs very easily. Many public and private sector banks offer the facility of opening a fixed deposit account. The only exception is rural and co-operative banks.
- Post Office Fixed Deposit Scheme -Investment in post office fixed deposit scheme with a duration of five years is eligible for a tax deduction as per section 80 (C) of the IT Act, 1961.
- Transfer ability - Fixed deposit account in post offices are eligible for transfer from one post-office branch to another.
- Type of Account - An individual can hold tax saving fixed deposit in ‘single mode’ or ‘joint mode’ as per his/her preference. If the opted type is a joint account, the tax benefit can be claimed only by the first account holder.
- TDS Applicability -According to the tax bracket of a person, a tax is levied on the interest earned on a fixed deposit account. Hence, Tax Deducted at Source (TDS) is applicable. The interest on the deposit amount is payable on monthly/quarterly frequency. Additionally, account holders or can re-invested the earned interest.
- Nomination Facility -A Fixed deposit offers a nomination facility.
- Additional Benefits -Mostly, FD interest rates of all banks are higher for senior citizens.
How to Find the Best Fixed Deposits in India?
When it comes to finding the right type of fixed deposit, it is recommended to look for banks, instead of organizations that issue fixed deposit policies for the investors. Some banks offer decent FD interest rates in a short period, and others may provide better interest in the longer run. The FD interest rates allowed by the banks tend to change regularly. You need to check the current bank FD rates in the websites of respective banks.
Go for a Company only if:
Many companies offer FD policies as well. The FD interest rates are lucrative. Though most of the organizations live up to the promise, others may be a ‘Ponzi Scheme’.
To avoid any kind of disenchantment, read about the company over the internet, check the company’s credibility online, especially the history of solvency.
A little hard work and research will fetch you a great benefit in the minimum time possible. All you need to do is deposit your funds in the bank account and see your money multiply with time. Ensure that you benchmark with multiple sources to keep maximum alternatives available with yourself.
Having said that below are some the companies that offer fixed deposits at lucrative interest rates.
Best Company Fixed Deposit 2020
A company fixed deposit is an investment where non-banking financial institutions / companies accept deposits by investors. It offers a stipulated return on fixed deposits for a fixed period. The fixed deposit interest rates of financial firms are higher than the bank FD rates. The highest FD interest rates come with a higher risk. While bank fixed deposits are more secure, company deposits aren’t. It means, in case a company faces bankruptcy, the investors can’t sell their documents to recover the funds.
Before going for a company deposit, investors consider company funds based on the credit rating of the top companies. Companies having a credit rating of AAA or AA indicate that they have the required basic performance strength. Typically, ratings below AAA or AA reflect poor performance. It means, it is highly risky to invest in their fixed deposit schemes. Before signing up for a fixed deposit account, make sure to check the interest on fixed deposit offered by the company.
Given below is a Revised List of High-Paying Company-FDs for 2020:
|Name of Company||Fixed Deposit Term||Interest On Fixed Deposit (Regular)||Interest On Fixed Deposit (Senior)|
|Mahindra Finance||15 to 40 Months||7.75 to 8.35||7.85 to 8.45|
|Sundaram Home Finance||12 to 36 Months||7.0 to 7.25||7.50 to 7.75|
|HUDCO||12 to 60 Months||7.50 to 7.25||7.75 to 7.50|
|Kerala Transport Development Finance Corporation Ltd (KTFDC)||1 to 5 Years||7.50 to 7.25||7.75 to 7.50|
|LIC Housing Finance Limited||1 to 5 Years||7.25 to 7.35||7.50 to 7.55|
|Shriram City Union Finance||12 to 60 Months||7.72 to 8.65||7.97 to 8.90|
- FD interest ratesin India change from time to time.
- Interest on fixed depositsfor senior citizens can vary from 7 percent per annum to 9.40 percent per annum.
Fixed Deposit Interest Rates Calculator
FD calculator is a user-friendly and convenient financial tool that is easily available online. A fixed deposit interest rate calculator can be used in a matter of a few seconds. All an individual needs to do is type FD interest rate calculator in his/her Google search bar and various results will be displayed. By using an FD interest rates calculator, an individual can instantly calculate how much interest he/she will earn on his/her deposit.
How does a Fixed Deposit Interest Rates Calculator Work?
Fixed deposit interest calculator computes the interest earned by a fixed deposit using the following components.
- Amount to be Deposited: It is the principal amount an FD holder invests in a fixed deposit. The amount is invested only once and an individual can decide the amount as per his/her investment goals.
- Deposit Term: It’s the time duration for which the amount is invested in an FD. Deposit term can vary from 7 days to 10 years.
- Interest Rate: It's the rate at which interest will be earned on the deposit amount. It is formulated based on deposit amount and tenure. Once an individual has entered the details mentioned above, the FD interest rates calculator displays the amount which will be paid out at the time of maturity.
Fixed Deposit Compound Interest Calculator
A compound interest calculator is used to compute the interest amount as well as the maturity amount at a compounding rate of interest. It is widely used to compute the amount that would be credited to the FD account holder under reinvestment deposit schemes. It is a free and easy tool that computes the compound interest for a fixed deposit based on the principal deposit amount, interest rate and the deposit duration.
Fixed Deposit Maturity Calculator
A maturity calculator is a financial tool that is used to compute the maturity amount i.e. the returns on the fixed deposit. This tool is easily available online and is quite similar to the fixed deposit interest rates calculator. It computes maturity amount based on various details of a fixed deposit, like the principal deposit amount, deposit term and the rate of interest.
Income Tax and Fixed Deposit Interest Rates
How is income earned by interest is taxed?
As mentioned earlier, income earned by interest is fully taxable. It’s added to the total income and taxed as per the applicable tax slab. It falls under the category ‘Income from Other Sources’ in the Income Tax Return.
When an individual receives certain payments, the payer is legally bound to deduct a tax before making those payments. The tax deducted is known as TDS and has to be deposited with the government. After deducting the TDS, the payee will receive the net amount Who, in turn, will have to add the gross amount to his/her income to adjust TDS against his/her final tax liability.
Banks deduct Tax Deducted at Source on income earned by interest as it is accumulated. Some people tend to believe that banks deduct tax at the time a fixed deposit matures and the earned interest is credited. However, bank will deduct TDS at the end of every financial year.
When to Pay Tax on Income Earned by Interest?
In case an fixed deposit account holder is supposed to pay the tax on his/her income earned by interest, he/she must pay it before the end of a financial year i.e. 31st March.
Note- If an FD holder earns a large income from interest, then he/she must pay tax may on a quarterly basis.
Fixed Deposit (FD) vs. Recurring Deposit (RD)
Both recurring deposits and fixed deposits offer interest on the deposit amount. However, there is one single feature that one ought to be aware of. Both RDs and fixed deposits have a deposit term but in fd, one has to deposit an amount just once while investors investing in recurring deposit must deposit a fixed amount in stipulated intervals.
Investors who want to invest their money in the fixed deposits have to select a term, that typically ranges from 7 days - 10 years, and he/she must deposit a fixed amount once. The FD interest rates would be credited to the investor’s account on a monthly/ quarterly basis (as opted).
Investors who want to invest their money in recurring deposits can deposit a fixed amount on a monthly basis and earn interest. The interest would be credited along with the capital at the time of maturity.
The difference between recurring deposits vs. fixed deposits is listed below.
|Basis||Fixed Deposit||Recurring Deposit|
|Term||Generally, fixed deposit schemes are offered for 7 days - 10 years. The account holder can opt for deposit term as per his investment goals.||Usually, deposit term for recurring deposits varies from 1 year - 10 years. The account holder needs to deposit a stipulated amount during regular intervals over opted deposit term.|
|Interest Rate||On per annum basis, interest rate varies between 6.96 percent - 8.00 percent as per deposit amount and opted term.||On per annum basis, interest rate varies between 6.96 percent - 8.00 percent. Typically, the rate of interest for RD varies on basis of deposit term and investment amount.|
|Minimum and Maximum Limit||A fixed deposit doesn’t come with any restriction on the investment amount. That being said, banks decide and set the minimum investment amount as Rs. 100 and the maximum investment amount is Rs. 1.5 lakh.||There isn’t any minimum or maximum limit as such. Usually, it varies from bank to bank. Typically, banks set the minimum investment amount as Rs. 1000 and the maximum limit as Rs. 15 lakhs each month.|
|Withdrawal||By the end of deposit tenure, premature withdrawal is allowed. The fixed deposit account holder will have to pay a penalty, however.||No premature withdrawal is allowed.|
|Required Documents||Proof of identity and proof of address are required to open a fixed deposit account.Additionally, as per the requirement of the bank, customers need to submit documents such as PAN card, passport, & income documents.||Proof of identity and proof of address are required to open an RD.Additionally, as per the requirement of the bank, customers need to submit documents such as PAN card, passport, & income documents.|
|Tax Benefits||Under section 80C of IT Act, 1961, fixed deposit account holders can claim tax benefits.||No tax will be deducted in case earned interest on RD is up to 10, 000 Rupees.|
|Taxability||Interest earned on the fixed deposit account is taxable. Majorly, banks deduct TDS.||Interest earned on the RD is taxable. Majorly, banks don’t deduct TDS.|
|Extra Benefits||Loan facility is offered.||No facility as such.|
Fixed Deposit Account Rules Every Investor/ Potential Investor Ought to Know
Here are the fixed deposit account rules that are a must to know for every investor as well as a potential investor.
- Tax Deducted at Source (TDS)-Interest earned on bank fixed deposit is taxable. It means, income earned as interest is credited to the income and will be taxed as per the applicable tax slabs. In case the income earned from interest for a financial year is greater than 10,000 rupees, banks levy TDS @10 percent on the earned interest.
Note- In case the fixed deposit account holder hasn’t provided his/her PAN (permanent account number), the bank will deduct Tax Deducted at Source@ 20 percent.
- Loan/Overdraft Facilities-Overdraft or loan facility against fixed deposits is available. For example, State Bank of India offers the facility of loan/overdraft of up to 90 percent of the principal amount. SBI charges 1 percent higher interest than the interest earned on the fixed deposit.
- Insurance of Fixed Deposit-It is also known as deposit insurance. Basically, it’s a protection cover that an FD holder gets on his/her deposit in the bank. This facility is provided by Deposit Insurance and Credit Guarantee Corporation. DICGC is a subsidiary of the Reserve Bank of India (RBI). The insurance premium is paid by the banks. If a bank is bankrupted, DICGC would provide a maximum sum of1 lakh Rupees to every FD holder for the principal as well as interest amount.
- Clubbing of Interest Income:Interest earned from FD or RD is clubbed across all bank branches for 2 main purposes.
- For calculating the total interest earned by an FD holder during a specific financial year.
- For calculating the applicability of Tax Deducted at Source.
- Form 15G/15H:To prevent TDS, an FD holder can submit either Form 15G or 15H to the bank. These are self-declaration forms that can be submitted by an FD holder. The form states that an FD holder’s total income doesn’t fall in the taxable income bracket.
If an FD holder fails to do so, he/she can claim tax refund while filing his/her income tax return.
- Minor or spouse:Many FD holders tend to think that one can avoid tax deduction by investing their money in the name of their minor child or non-working spouse. This is a myth which needs to be bused right now. If an FD holder invests in a bank FD in the name of his/her non-working spouse or minor child, the earned interest income would be accredited to his/her income. It will be taxed as per his/her income tax slab.
- Cumulative deposits:In case an FD holder has opted for a cumulative deposit to get the earned interest at the end of the deposit term, tax experts recommend declaring the income earned by interest every year. It’s because, his/her bank might deduce the applicable TDS and deposit it as per his/her PAN. If an FD holder doesn’t declare his/her interest income, it will reflect a mismatch in his/her 26AS statement i.e. tax credit statement and the return filed by him/her.
- Allahabad Bank FD Rates
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- IDBI Bank FD Rates
- IDFC Bank FD Rates
- Indian Bank FD Rates
- Indian Overseas Bank FD Rates
- IndusInd Bank FD Rates
- Karnataka Bank FD Rates
- Kotak Mahindra Bank FD Rates
- Punjab National Bank FD Rates
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- State Bank of Hyderabad FD Rates
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- UCO Bank FD Rates
- Union Bank of India FD Rates
- Vijaya Bank FD Rates
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