FD Interest Rates

One of the smartest and conventional ways of securing your money and let it grow is to invest it in a bank FD scheme. It not only develops a habit of saving but also helps you earn best interest rates on FD. Under an FD scheme, the account holder deposits a specific amount for a fixed tenure, against which the bank offers interests, depending on the FD tenure and the deposit amount.

FD Interest rates can be calculated on the principal amount at the end of the FD tenure. The tenure of FD ranges from 7 days to 10 years, which can be opted for as per the requirement

Fixed Deposit Interest Rates 2020

Banks FD Interest Rates Tenure
SBI 2.90% - 5.40% 7 days to 1825 days
Axis Bank 3.25% - 5.80% 7 days to 1825 days
Bank of Baroda 2.90% - 5.30% 7 days to 1826 days
HDFC Bank 2.75% - 5.50% 7 days to 1826 days
ICICI Bank 2.75% - 5.50% 7 days to 1826 days
IDFC Bank 4.00% - 8.25% 7 days to 266815 days
Kotak Mahindra Bank 2.75% - 5.25% 7 days to 1825 days
(Last Updated : 8th Oct 2020)
*The FD interest rates mentioned in the above table are subject to change. The table does not represent any chronological order.

What is FD Interest Rates?

FD rate of interest refer to the bank interest rates to be availed on a fixed deposit scheme.

Provided by various banks and NBFCs, FDs are quite popular among the investors as it offers highest rate of interest and secured returns. FDs are also known as 'term deposits' or 'time deposits'.

With different types of FDs, 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.

Best FD Interest Rates in India 2020

Below comparison table shows the different FD rates in India offered by various banks:

Bank Senior Citizen's FD Interest Rates Regular FD Interest Rates Tenure
Allahabad Bank 3.55% - 6.00% 3.05% - 5.50% 7 days to 1825 days
Andhra Bank 4.00% - 5.95% 3.50% - 5.45% 7 days to 1095 days
Axis Bank 3.25% - 6.45% 3.25% - 5.80% 7 days to 1825 days
Bandhan Bank 4.00% - 9.85% 3.25% - 6.25% 7 days to 1825 days
Bank of Baroda 3.40% - 5.80% 2.90% - 5.30% 7 days to 1826 days
Bank of India 3.50% - 6.15% 3.50% - 5.50% 7 days to 1825 days
Bank of Maharashtra 3.50% - 5.75% 3.00% - 5.25% 7 days to 1096 days
Canara Bank 3.50% - 6.00% 3.50% - 5.50% 7 days to 1095 days
Central Bank of India 3.90% - 5.85% 3.40% - 5.35% 7 days to 1825 days
Citi Bank 3.25% - 4.50% 2.75% - 4.00% 7 days to 1096 days
Corporation Bank 4.00% - 5.95% 3.50% - 5.45% 7 days to 1096 days
Dena Bank 4.50% - 7.25% 4.00% - 6.75% 7 days to 1825 days
HDFC Bank 3.25% - 6.00% 2.75% - 5.50% 7 days to 1826 days
ICICI Bank 3.25% - 6.00% 2.75% - 5.50% 7 days to 1826 days
IDBI Bank 3.50% - 6.40% 3.00% - 5.80% 7 days to 3651 days
IDFC Bank 4.50% - 8.75% 4.00% - 8.25% 7 days to 266815 days
Indian Bank 3.55% - 6.00% 3.05% - 5.50% 7 days to 1825 days
Indian Overseas Bank 5.25% - 6.45% 4.50% - 5.70% 7 days to 1095 days
IndusInd Bank 4.50% - 7.50% 4.00% - 7.00% 7 days to 1857 days
Karnataka Bank 4.00% - 6.25% 3.50% - 5.75% 7 days to 1826 days
Kotak Mahindra Bank 3.25% - 5.75% 2.75% - 5.25% 7 days to 1825 days
Punjab National Bank 3.50% - 5.80% 3.00% - 5.30% 7 days to 1826 days
RBL Bank 5.50% - 8.00% 5.00% - 7.50% 7 days to 3650 days
State Bank of Hyderabad 6.00% - 7.40% 5.50% - 6.90% 7 days to 1825 days
SBI 3.40% - 6.20% 2.90% - 5.40% 7 days to 1825 days
State Bank of Mysore 6.00% - 7.40% 5.50% - 6.90% 7 days to 1825 days
State Bank of Travancore 6.00% - 7.50% 5.50% - 7.00% 7 days to 1825 days
Syndicate Bank 3.50% - 6.00% 3.50% - 5.50% 7 days to 1095 days
UCO Bank 3.90% - 6.00% 3.65% - 5.50% 7 days to 1825 days
Union Bank of India 4.00% - 5.95% 3.50% - 5.45% 7 days to 1826 days
Vijaya Bank 5.50% - 7.30% 5.00% - 6.80% 7 days to 501 days
Yes Bank 5.50% - 7.75% 5.00% - 7.25% 7 days to 730 days
(Last Updated : 8th Oct 2020)
*The FD interest rates mentioned in the above table are subject to change. The table does not represent any chronological order.

All bank interest rates list mentioned in the above table will help you figure out which bank is the best for FD as per your requirement.

FD interest have fallen consistently over the last 5 years.
Invest in Plans that offer Guaranteed Returns for over 25 Years
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Fixed Deposit Interest Rates in India - Important Terms

Timely Closure:

It refers to the closure of your FD account at the time it matures. When you close your fixed deposit account on its maturity date, the bank pays you back the principal amount with the interest that you have accumulated during the term chosen.

Partial Withdrawal:

As the name of this term suggests, the partial withdrawal enables you to withdraw a certain amount from your fixed deposit amount. The reason for partial withdrawal can be some personal emergency or you may want to deposit some amount with another bank that is offering you a good interest rate on FD that your current interest rate. Generally, it is allowed in Rs.1000 units, and the penalty levied by the bank is 1%. However, the remaining amount in your fixed deposit account will be able to earn the original and the best FD rates in India.

Breaking an FD Account:

It is opposite to the timely closure of your FD account. In timely closure, you withdraw the amount after completion of the maturity period of the FD, whereas in premature withdrawal or breaking the FD you withdraw your entire fixed deposited money before the maturity. Generally, banks do not allow premature withdrawal of fixed deposit accounts, however, it depends on the norms of the banks. Almost all the banks' levy penalty when you break the FD before its maturity and pays back the principal amount and the interest at the lowest rate of interest. However, banks like Bank of Maharashtra and Yes Bank waive off the penalty, if you withdraw your FD with the bank because of some emergency.

Bank Fixed Deposit Interest Rates - Special Features

  • The FD rates of all banks are higher than the regular savings account interest rates.
  • Any Indian resident including the minors and Hindu Undivided Family can open a fixed deposit account.
  • You can select two nominees in an application form for a FD. These two nominees are eligible for collecting the amount of FD by providing a valid death proof of the FD account holder.
  • Premature withdrawal of FD is not allowed. Therefore, you cannot withdraw the amount that you have deposited in it before the maturity. However, in case of an emergency, you can withdraw this amount by paying a penalty.
  • There is a sweep-in facility provided by the banks on FDs. With this facility, you can interlink your savings bank account with the FD account. The advantage of this facility is that you can auto-transfer your surplus money from a savings bank account to a FD account. It enables the depositors to earn the best FD rates in India on their savings account and provides an option to break the FD at any time and hence utilize the amount.
  • The banks also provide the facility to take a loan against FD for meeting any financial emergency. The deposited amount works as a security for the loan that you have taken. You can take a loan up to 75% - 90% of your FD amount depending upon your bank and the rate of interest on it varies from 1% to 1.5% over the FD interest rate.

Fixed Deposit Interest Rates - Senior Citizens

When it comes to investing their hard-earned money, senior citizens mostly prefer a fixed deposit account. The reason is the highest FD interest rate. The senior citizen FDs get the best FD rates in bank or every leading financial institution in India offers attractive FD interest rates for senior citizens.  

The below mentioned are some of the benefits to be availed with senior citizen fixed deposit account:

  • The minimum eligibility age is 60 years or more while initiating the investment
  • The tenure of senior citizen FDs is 7 days to 10 years in most of the Banks in India
  • The best FD rates in India for senior citizens are around 0.25% to 0.75% higher as compared to other FD 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

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. An individual needs to type an 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 the highest fixed deposit rates he/she will earn on his/her deposit. Alternatively, one can as well find out the best FD rates in India by using the following formula:

A = P * (1+r/n) ^ n * t

I = A - P

P = Principal Amount

A = Maturity Value

r = Interest Rate

n = Frequency of compound interest

t = Tenure

I = Earned interest

How does a Fixed Deposit Interest Rates Calculator Work?

The fixed deposit interest calculator computes the highest fixed deposit rates earned by using the following components:

  • Amount to be deposited: It is the principal amount an FD account 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 based on the 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 Interest Maturity Calculator

A Fixed Deposit Interest 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 the maturity amount based on various details of a fixed deposit, like the principal deposit amount, deposit term, and the FD rates.

Taxation on Fixed Deposit Interest Rates

How is Income Earned by Interest 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 slabs. It falls under the category ‘Income from Other Sources’ in the Income Tax Return.

Why TDS?

Banks deduct Tax Deducted at Source on income earned by interest as it is an accumulated amount. Some people tend to believe that banks deduct tax at the time a fixed deposit scheme matures and the interest earned is credited. However, the bank will deduct TDS at the end of every financial year.

When to Pay Tax On Income Earned by Fixed Deposit Interest Rates?

In case a 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. But now the deadline has been extended amid the ongoing pandemic.

Note- If an FD account holder earns a large income from interest, then he/she must pay tax every quarter.

Fixed Deposit Investment Tips

Mentioned below are some of the tips that one should consider before investing in a fixed deposit. These tips are:

  • Before investing in a FD, you must consider the factors like maturity, penalty on breaking the fixed deposit before its maturity, rate of interest, etc.
  • It is advised to do your research related to the latest trend of the FD interest rates. If you are thinking to re-invest when the FD rates in India go up, then it is suggested to opt for an FD of shorter tenure and vice-versa.
  • Before taking the final decision of opening a fixed deposit account, you must go through the tenure-wise rate of interest offered by the bank. Sometimes, the banks offer highest interest rate on FD for some specific tenures.
  • In addition to this, you must plan your expenses carefully and make sure that it is not affecting your budget.

Top 5 Bank Interest Rates on FD

Tenure: Interest Rates on FD for 1 year

Bank Name

Interest rate compounded qtrly

What Rs 10,000 will grow into

Indusind Bank

7.00%

10718.59

RBL Bank

6.85%

10702.80

DCB Bank

6.65%

10681.77

Ujjivan Small Finance Bank

6.50%

10666.02

Lakshmi Vilas Bank

6.00%

10613.64

*The FD interest rates mentioned in the above table are subject to change. The table does not represent any chronological order.

*Data as on October 01, 2020

Tenure: Interest Rates on FD for 2 years

Bank Name

Interest rate compounded qtrly

What Rs 10,000 will grow into

Indusind Bank

7.00%

11488.82

RBL Bank

6.85%

11454.99

DCB Bank

6.80%

11443.73

AU Small Finance Bank

6.50%

11376.39

Ujjivan Small Finance Bank

6.50%

11376.39

*The FD interest rates mentioned in the above table are subject to change. The table does not represent any chronological order.

*Data as on October 01, 2020

Tenure: Interest Rates on FD for 3 years

Bank Name

Interest rate compounded qtrly

What Rs 10,000 will grow into

RBL Bank

7.15%

12368.97

DCB Bank

6.95%

12296.25

AU Small Finance Bank

6.75%

12223.93

Indusind Bank

6.75%

12223.93

Ujjivan Small Finance Bank

6.05%

11973.86

*The FD interest rates mentioned in the above table are subject to change. The table does not represent any chronological order.

*Data as on October 01, 2020

Tenure: Interest Rates on FD for 5 years

Bank Name

Interest rate compounded qtrly

What Rs 10,000 will grow into

DCB Bank

6.95%

14113.06

Indusind Bank

6.75%

13974.99

AU Small Finance Bank

6.50%

13804.20

RBL Bank

6.50%

13804.20

Lakshmi Vilas Bank

6.00%

13468.55

*The FD interest rates mentioned in the above table are subject to change. The table does not represent any chronological order.

*Data as on October 01, 2020

Types of Fixed Deposit Interest Rates in India

FD interest rates are of two types as mentioned below:

Flexi FD Interest Rates

With a Flexi FD, the depositor can link its FD 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 highest rate of interest on FD.

Regular FD Interest Rates

Regular FDs are designed for a fixed tenure, which offers a highest FD interest rates, depending on the FD tenure.

Tax Saving Fixed Deposit Interest Rates

Tax-saving FDs allow claiming tax benefits* on the interest earned from the fixed deposits. With this account, the depositor can claim a tax deduction up to Rs 1.5 lakh in a year u/s section 80 C. The money deposited is fixed for 5 years minimum, where pre-mature or partial withdrawal is not allowed; neither a loan can be applied.

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 Rs 1.5 Lakh 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 FD 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. Loans 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 FD 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 - FD account in post offices are eligible for transfer from one post-office branch to another.
  • Type of Account - An individual can hold a tax-saving FD in 'single-mode' or 'joint mode' as per his/her preference. If the opted type is a joint account, the tax benefits* can be claimed only by the first account holder.
  • TDS Applicability - According to the tax slabs, the 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 can re-invest the earned interest.
  • Nomination Facility - A FD scheme also offers a nomination facility to the account holder.
  • Additional Benefits - Mostly, all bank FD rates are higher for senior citizens.

Fixed Deposits Vs 100% Guaranteed Return Plans

Features Fixed Deposits vsGuaranteed
Tax benefit on premium
48,800
Tax paid on return* As per tax slab* No Tax
Maturity Value Guaranteed Upfront Guaranteed Upfront
Life Cover

Factors Impacting FD Rates in India

The factors that impact fixed deposit interest rates in India are mentioned below:

Present Scenario of the Nation’s Economy

Gross domestic product i.e. the value of the total goods & services produced in India during a specific period reflects the present scenario of the nation's economy. In case it increases, it means India's economy is prospering and hence, the FD rate of interest will also increase.

Monetary Policy of Reserve Bank of India

Banks in the country borrow money from the Reserve Bank of India. The interest rate at which the money is borrowed is known as the Repo Rate. If there is an increase in repo rates then the banks will enhance their interest rates on FDs (and loans).

Effect of Recession and Inflation

Inflation is the rate at which the cost of goods & services increases. To control inflation, the interest rates are hiked so that people are tempted to save more. When inflation decreases, the FD interest rate also decreases. As a result, they borrow money and spend more.

The Reserve Bank of India makes the best use of interest rates to tackle inflation. Last year, RBI reduced the repo rate by 40 basis points from 4.4% to 4%.

Fixed Deposit Account Rules to Consider

Here are some fixed deposit account rules that are a must to know for every investor as well as a potential investor.

  • Tax Deducted at Source (TDS) - The interest earned on bank fixed deposits is taxable. It means, income earned as interest is added to your total 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 40,000 rupees (Rs 50,000 in case of senior citizens), 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, the State Bank of India offers the facility of loan/overdraft of up to 90 percent of the principal amount. SBI charges a 1 percent higher interest than the interest earned on the fixed deposit.
  • Insurance of Fixed Deposit - It is also known as deposit insurance. It's a protection cover that an FD account 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 of Rs 1 lakh to every FD account 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 account holder during a specific financial year
    • For calculating the applicability of Tax Deducted at Source
  • Form 15G/15H - To prevent TDS, an FD account holder can submit either Form 15G or 15H to the bank. These are self-declaration forms that can be submitted by an FD account holder. The form states that an FD account holder's total income doesn't fall into the taxable income bracket.
    If an FD account holder fails to do so, he/she can claim a tax refund while filing his/her Income Tax Return.
  • Minor or Spouse - Many FD account 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 busted right now. If an FD account holder invests in a highest interest rate 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 account holder has opted for a cumulative deposit to get the best interest rates in India 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 account 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.

How to Find the Best FD Interest Rates in India?

When it comes to finding the right type of FD, it is recommended to look for banks, instead of organizations that issue FD policies for the investors. Some banks offer decent interest rate on FD 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 interest rate on the websites of the respective banks.

Go for a Company Only if

Many companies offer FD policies as well. These companies may offer highest rate of interest on FD. 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.

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 every month and earn interest. The interest would be credited along with the capital at the time of maturity.

The difference between Recurring Deposits and 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, the deposit term for recurring deposits varies from 6 months - 10 years. The account holder needs to deposit a stipulated amount during regular intervals over opted deposit term

Interest Rate

On per annum basis, the interest rate varies as per the deposit amount, bank, and the opted term.

Typically, the rate of interest for RD varies on basis of the deposit term, the bank, and the 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 there is no set maximum limit, as it varies from one bank to another

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

A loan facility is offered.

No facility as such.

FD Interest Rates FAQs

  • Q. Is interest on fixed deposit is compounded?

    Ans: Generally, the interest on a fixed deposit is compounded and is credited along with the principal sum when the deposit matures. However, in case the fixed deposit account holder opts to get the credit of interest on a monthly or quarterly basis, then a compound interest isn't offered.
  • Q. What’s a re-investment plan in an FD account?

    Ans: A re-investment plans a type of term deposit. Rather than the interest being credited at an opted regular frequency, the interest is credited at the end of the maturity period. At the time of maturity, the regular interest, as well as the principal sum, are paid out.
  • Q. Can I get fixed deposits interest credited to my account every month?

    Ans: Yes. The periodicity of the interest paid for a fixed deposit depends on your preference.
  • Q. How can I compute FD interest rates in India?

    Ans: It is very simple. You can use a fixed deposit interest calculator, fill in the asked details and that's it. The tool is available online. All you have to do is type a fixed deposit interest calculator and conduct a Google search.
  • Q. What are the factors that impact fixed deposit rates in India?

    Ans: The factors that impact fixed deposit rates in India are mentioned below.
  • Q. What is the minimum amount that can be deposited in an FD account?

    Ans: There is no limit as such. But, it varies from bank to bank.
  • Q. What are the pre-requisite documents for opening a fixed deposit account?

    Ans: Here are the documents that are a must-have for opening a fixed deposit account.

    Proof of Identity

    • Aadhaar card
    • PAN card
    • Driving license
    • Voter ID card
    • Government ID card

    Address proof

    • Passport
    • Electricity bill
    • Telephone bill
    • Bank Statement with a canceled cheque
  • Q. Is the rate of interest on FD for senior citizens is higher as compared to regular FD?

    Ans: Majorly, banks offer the highest interest rates on FD for senior citizens. It ranges from 4.50 percent - 8 percent.
  • Q. What’s the minimum and maximum term for which I can open a fixed deposit account?

    Ans: There is no minimum duration for an FD. Typically, the minimum duration for an FD is 7 days, and the maximum duration is 10 years.
  • Q. Do I have to pay tax on my FD income?

    Ans: Typically, banks deduct TDS on the interest in case the interest-earned income through the fixed deposit is more than 10,000 Rupees per annum. The TDS is deducted at the rate of 10 percent on the income earned by interest if your account is linked with your PAN number. If your account isn't linked with your PAN, the bank, then TDS is deducted at the rate of 20 percent on the income earned by interest.
  • Q. Who can invest in FDs?

    Ans: In case you are a resident of India, you can invest in FD schemes, regardless of your age. Apart from that, Hindu Unified Family (HUFs), private or public Ltd. co. and partnership firms are eligible to invest in a fixed deposit account.
  • Q. Does investment made into term deposits provide any benefits?

    Ans: Yes. It offers multiple benefits such as high tax highest interest rates on FD, tax-saving benefits, etc.
  • Q. Can I redeem my fixed deposits before the original term?

    Ans: Yes. A fixed deposit can be closed before its maturity term. In case you close your Fixed Deposit before its maturity, the interest will be credited at the rate as applicable on the deposit date for the duration the amount was deposited in the bank.

    When a fixed deposit is withdrawn before maturity, it is called a premature withdrawal. A few banks charge a penalty for premature withdrawal.

  • Q. When can I renew my FD?

    Ans: You can renew a deposit at the end of its maturity period for the same deposit term.
  • Q. Are there any loans offered against fixed deposits?

    Ans: Yes. If you want to withdraw your deposit prematurely, you can consider taking a loan against your FD. This way, you won’t have to pay any penalty, and you will get ample funds to manage your finances. Additionally, you will earn interest on the fixed deposit. You can take a loan of up to 70 percent - 90 percent of your principal amount. Generally, the interest on the loan is charged 2 percent to 2.5 percent higher than the interest rate offered by your Fixed Deposit. Still, the FD rate of interest is lesser than that of a personal loan.
  • Q. Can I go for an auto-renewal option at the time of opening a fixed deposit account?

    Ans: Yes. You can select an auto-renewal facility at the time of opening a fixed deposit account. Additionally, you can get in touch with your bank and opt for auto-renewability anytime before the maturity of your FD. The auto-renewal facility enables your fixed deposit to get renewed by default for the same fixed deposit term.
  • Q. Why does the rate of fixed deposit keep on changing?

    Ans: Various factors influence banks to change the interest rate of fixed deposits. A few factors are mentioned below.
    • Deposit rates share a relationship with the inflation rate-Ideally; banks should offer positive returns to the depositors. Investors should keep a tab on the inflation rate as it affects the lending rates. There can be times when depositors might get negative returns due to high inflation.
    • Present Liquidity of the Country-When there is sufficient liquidity, banks don't focus on FDs to fulfill their financial goals, unlike the times when there is tight liquidity. During such times, banks turn the fixed deposits. As a result, bank FD rates in India can change.
    • Demand and supply scenario-When the demand for credit is less, usually, bank FD interest rates are decreased and vice-versa. Typically, banks cut interest on fixed deposits when a cut is anticipated on the lending rate.

Latest FD News

  • Small Private Banks Offer Up to 7% Interest on 1-Year Fixed Deposits

    In the prevailing economic situation, smaller private banks in India are providing interest rates of up to 7 per cent on fixed deposits with a maturity of one year.

    At present, smaller private banks such as IndusInd Bank and YES Bank is offering an interest of 7 per cent on fixed deposits of one-year maturity as compared leading foreign banks. Even RBL Bank is currently offering 6.85 per cent of interest on one year fixed deposits.

    On the other hand, foreign banks such as Standard Chartered, Deutsche Bank and DBS Bank are offering a lower rate of FD interest rates on one-year deposits. While Standard Chartered is offering an FD interest rate of 6.30 per cent, DBS Bank and Deutsche Bank is providing an FD rate of 4.15 per cent and 4 per cent respectively on deposits of one year.

    However, leading private and public banks are offering a lower FD rate than smaller private banks but higher than leading foreign banks. For instance, AXIS Bank, ICICI Bank and HDFC Bank are providing an FD interest rate of 5.15 per cent, 5 per cent and 5.10 per cent respectively for one-year deposits. Similarly, leading public sector banks, such as State Bank of India (SBI) and Bank of Baroda is currently offering an interest of 4.90 per cent for a one year FD.

  • Small Saving Plans Offer Better Interest Rates Than Bank FD

    Amidst the dropping bank FD rates, small savings schemes, such as National Savings Certificate and post office scheme, are currently offering better interest rates to depositors as compared to fixed deposits.

    As per the latest FD rates, the State Bank of India offers an interest of 4.9 per cent for one year FD while ICICI Bank and HDFC Bank yields an interest rate of 5 per cent and 5.1 per cent respectively for similar deposits. On the other hand, a post office saving scheme of one year tenure fetches a 5.5 per cent interest, which is higher than Bank FD rates.

    The small savings plans are able to beat the bank FDs as the Finance Ministry makes no changes to the interest rates of small savings schemes for the last quarter of the year ending in December 2020. With this move, the government hopes to raise funds by making small saving schemes more attractive to customers as compared to fixed deposits.

    The gap in interest rates is wider between the two types of schemes for deposits of five-year tenure. While SBI offers 5.4 per cent interest for a five-year fixed deposit, both ICICI Bank and HDFC Bank provides an interest rate of 5.5. per cent on similar deposits.

    However, a five-year deposit under the National Savings Certificate fetches an interest rate of 6.8 per cent. Similarly, a post office scheme of five years yields an interest of 6.7 per cent....

  • All You Should Know About HDFC Bank’s Special Scheme of FD for Senior Citizens

    After SBI’s (State Bank of India) special FD scheme for senior citizens, it is HDFC Bank that has launched an FD scheme for the senior citizens with the name ‘Senior Citizen Care FD’. As per the website of HDFC Bank, the bank is now offering 75 basis points additionally for the deposits that have the tenure of more than five years for investments that are up to Rs. Five Crore. The people who want to get the benefit of this scheme should opt for this scheme between 18th May 2020 to 30th September 2020. On the website of the Bank, it is also stated that senior citizens will be getting an additional 0.25% premium, which is over and above the current premium that is 0.50%. Currently, for the deposits that are less than Rs. Two Crore and have tenure of five years and one day to ten years have the best FD rates 5.75% for non-senior citizens and for senior citizens it is 6.5% per annum. As per the website of HDFC Bank, the key points of this scheme are:
    • This scheme with the name of ‘Senior Citizen Care’ is applied to all the new FDs that are booked as well as for all the renewable FDs of the senior citizens during the above-mentioned period. However, it does not apply to NRIs.
    • In the situation of pre-mature closure of FD that is booked in the above-mentioned offer (including partial closure/ sweep in) before five years, the FD rate of interest will be 1.00% less from the applicable base rate or contracted rate for the period the deposit has been with the bank, whichever is lesser.
    • In the situation of premature closure of FDs booked as per the above-mentioned offer (including partial closure or sweep in) after five years, the rate of interest will be reduced by 1.25% below the applicable base rate or contracted rate for the period the deposit is kept in the bank, whichever is lesser.

    With this, the Bank has also revised the interest rate of Fixed Deposits from 18th May 2020. As per their website, FDs of different tenures will get the interest between the range of 3% to 5.75% per annum, and a senior citizen will get the interest from 3.5% to 6.5%..

  • ICICI Bank Cuts the Rates of Its Fixed Deposits - See the Full News Here:

    • Due to the lockdown, the banks are getting comparatively less requirement for loans, even they have enough liquidity.
    • This scenario has put pressure on the interest rates of fixed deposits.
    ICICI Bank has revised its rates of fixed deposits and it is not only this bank, but many other banks are lowering their fixed deposits rates because of surplus liquidity. On 4th June, ICICI Bank has as well cut down the rates of interest on its savings accounts deposits that are less than Rs.50 Lakhs. This interest rate is reduced to 3% from 3.25%. For all the deposits that are more than Rs.50 lakhs, the interest is decreased from 3.75% to 3.50%. Presently, the banks have a lesser need for loans and have enough liquidity. The lesser requirement for loans is the impact of lockdown. This has put pressure on the current FD rates. Starting from the rate of interest of 2.75% on FDs deposits that are between 7 days to 14 days. On the FDs having deposits between one year to 389 days, the ICICI Bank is offering an interest rate of 5.15%. The customers are getting an interest of 5.35% on the Fixed Deposit having maturity between 18 months and two years. For deposits that are over three years, the rate of interest is 5.50%. On the other hand, the senior citizens will get an additional rate of interest of fifty basis points in all the maturities of FDs...
  • SBI Cuts Down the Rates of FD by 40 BPS Throughout All the Tenors. See the New Rates

    The SBI (State Bank of India) has cut down the interest rates of its term deposits (retail) by 40 bps (basis points) for all its tenors. These new rates came into existence from 27th May 2020. After this sharp inclination in the rates, the FDs having tenure between one year to less than two years are having an interest rate of 5.1%, FDs with three years to less than five years are having a rate of 5.3% and five years to up to ten years are having an interest rate of 5.4%. This is for the second time when this Public Sector Bank has cut down its FD’s interest rates in May month. Earlier in May 2020 only, SBI had cut down the rate of interest of its FDs by 20 bps. These rates were applicable for the FDs that were having the tenure of up to three years and it became effective from 12th May 2020. Despite lowering its rates, SBI has as well launched a product for safeguarding the interests of the seniors. This news was given in a press release from the bank. In this process, SBI launched SBI We care Deposit for its senior citizens. This scheme will come in effect from 30th September 2020. In this release, SBI as well stated that the new product with an extra premium of 30 bps will be given to the senior citizens for the deposits of 5 years and above. This scheme will be in effect from 30th September 2020...
  • For the Second Time in a Month, SBI Cuts Down FD Interest Rates

    India's largest bank State Bank of India (SBI) for the second time inside a month has chopped down interest rates on the fixed deposits. From March 10, 2020, the amended rates have been into impact. Prior on 10 February 2020, State Bank of India had cut interest rates.

    According to the present amendment, the SBI FD's between 7 days to 45 days, which prior 4.5% will right now bring 4%. In like manner, the FD’s that are one year to under 5 years, which prior got 6% will presently get 5.9% and between 5 years as long as 10 years, which prior brought 6% will currently bring 5.9%.

    Nonetheless, the senior residents in contrast with the common citizens will keep getting 50 basis points on higher interest rates. Any retails fixed deposits, which is of not as much as Rs. 2 crores the rates will be pertinent the equivalent.

    The revised FD interest rates will apply to both the fresh deposits and the renewal of the maturing deposits. It is also expected that additionally different banks may likewise bring down interest rates....

Written By: PolicyBazaar - Updated: 21 October 2020
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