FD Interest Rates

One of the smartest ways of securing your money and let it grow is to invest in fixed deposit schemes. It not only develops a habit of savings but also helps you earn considerable FD interest rates. 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 deposit amount.

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

What Do You Understand by FD Interest Rates?

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

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 deposits, 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 2020 in India for Less Than 1 Year

Bank Tenure FD Interest Rates
Kotak Mahindra Bank FD Rates 181 days to 269 days 4.75%
State Bank Of India FD Rates 180 days to 210 days 4.40%
ICICI Bank FD Rates 91 days to 184 days 4.10%
Axis Bank FD Rates 5 months to 6 months 4.50%
HDFC Bank FD Rates 91 days to 6 months 4.10%
Bank of Baroda FD Rates 91 days to 180 days 3.90%
IDFC Bank FD Rates 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 Bank FD Interest Rates in India 2020

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

Bank FD Interest Rates 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 Fixed Deposit 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.

FD interest have fallen consistently over the last 5 years.
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Types of Fixed Deposit Interest Rates in India

Fixed deposits can be availed in below types:

Flexi FD Rates

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 FD Interest Rates

Regular FDs are designed for a fixed tenure, which offers a higher rate of interest, depending on the FD tenure.

Tax Saving Fixed Deposit Interest Rates

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 eligibility 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 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 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.

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
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How to Find the Best Fixed Deposits Rates 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 Interest Rates 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 7.97o 8.90

*FD interest rates in India change from time to time.

*Interest on fixed deposits for 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. An individual needs to 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 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. 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 Interest Rates Calculator

A Fixed Deposit 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 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 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.

Why TDS?

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 Rates on FD?

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 account 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 lakh 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.

Factors Impacting Fixed Deposit Rates in India

The factors that impact fixed deposit 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 time period reflects the present scenario of the nation’s economy. In case it increases, it means India’s economy is prospering and hence, 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 cost of goods & services increases. In order to control inflation, the interest rates are hiked so that people will be tempted to save more. When inflation decreases, the rate of interest is decreased. 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 0.25 percent to decrease inflation.

Fixed Deposit Account Rules to Consider

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 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 in the taxable income bracket.
    If an FD account holder fails to do so, he/she can claim 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 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 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 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.

FD Interest Rates FAQs

  • Q. Is interest on fixed deposit is compounded?

    Ans: Generally, the interest on 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 interest credited 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 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 on a monthly basis?

    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 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 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. Present Scenario of the Nation’s Economy

    Ans: Gross domestic product i.e. the value of the total goods & services produced in India during a specific time period reflects the present scenario of the nation’s economy. In case it increases, it means India’s economy is prospering and hence, 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 cost of goods & services increases. In order to control inflation, the interest rates are hiked so that people will be tempted to save more. When inflation decreases, the rate of interest is decreased. 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 0.25 percent to decrease inflation.

  • Q. What is the minimum amount that can be deposited in an FD account?

    Ans: There is no limit as such. But, it varies 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 afixed 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 cancelled cheque
  • Q. Is the rate of interest on FD for senior citizens is higher as compared to regular FD?

    Ans: Majorly, banks offer 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 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 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 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. 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: There are various factors that 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 fulfil their financial goals, unlike the times when there is tight liquidity. During such times, banks turn the fixed deposits. As a result, the bank FD rates 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 deposit when a cut is anticipated on the lending rate.

Latest FD News

  • 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 a rate of interest 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 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 rates of deposits.

    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.

    ICICI Bank FD Rates on the Deposits Less than Rs.2 Crore for General Public:

    Tenure Interest Rate
    Seven to Fourteen Days 2.75%
    Fifteen to Twenty-Nine Days 3.00%
    Thirty to Forty-Five Days 3.25%
    Forty-Six to Sixty Days 3.50%
    Sixty-One to Ninety Days 3.50%
    Ninety-One to One-Twenty Days 4.10%
    One-Twenty-One to One-Eighty-Four Days 4.10%
    One-Eighty-Five to Two-Hundred-Ten Days 4.50%
    Two-Hundred-Eleven to Two-Hundred-Seventy Days 4.50%
    Two-Hundred-Seventy-One to Two-Hundred-Eighty-Nine Days 4.50%
    Two-Hundred-Ninety to less than one year 4.75%
    One year to Three-Eighty-Nine days 5.15%
    Three-Ninety days to less than Eighteen months 5.15%
    Eighteen months one day to two years 5.35%
    Two years one day to three years 5.35%
    Three years one day to Five years 5.50%
    Five years one day to Ten years 5.50%
    Five years (FD of 80C) Maximum Rs.1.50 Lakh 5.50%

    Disclaimer : Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

    ICICI Bank FD Rates on the Deposits Less than Rs.2 Crore for Senior Citizens:

    Tenure Interest Rate
    Seven to Fourteen Days 3.25%
    Fifteen to Twenty-Nine Days 3.50%
    Thirty to Forty-Five Days 3.75%
    Forty-Six to Sixty Days 4%
    Sixty-One to Ninety Days 4%
    Ninety-One to One-Twenty Days 4.6%
    One-Twenty-One to One-Eighty-Four Days 4.6%
    One-Eighty-Five to Two-Hundred-Ten Days 5%
    Two-Hundred-Eleven to Two-Hundred-Seventy Days 5%
    Two-Hundred-Seventy-One to Two-Hundred-Eighty-Nine Days 5%
    Two-Hundred-Ninety to less than one year 5.25%
    One year to Three-Eighty-Nine days 5.65%
    Three-Ninety days to less than Eighteen months 5.65%
    Eighteen months one day to two years 5.85%
    Two years one day to three years 5.85%
    Three years one day to Five years 6%
    Five years one day to ten years 6.3% (ICICI Bank Golden Years FD)
    Five years (FD of 80C) Maximum Rs.1.50 Lakh 5.50%

    Disclaimer : Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

  • 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.

    Rates of FD Effective from 27th May 2020

    Tenors Current Rate Rates from 27th May 2020 Current Rates for Senior Citizens Rates form 27th May 2020
    Seven Days to Forty-Five Days 3.3 2.9 3.8 3.4
    Forty-Six Days to One Seventy-Nine Days 4.3 3.9 4.8 4.4
    One-Eighty Days to Two Hundred-Ten Days 4.8 4.4 5.3 4.9
    Two Hundred Eleven Days to less than One Year 4.8 4.4 5.3 4.9
    One Year to Less than Two Years 5.5 5.1 6 5.6
    Two Years to Less than Three Years 5.5 5.1 6 5.6
    Three Years to Less than Five Years 5.7 5.3 6.2 5.8
    Five Years to up to 10 Years 5.7 5.4 6.5 6.2

    Source: From Website of SBI

    Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.

    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: 05 August 2020
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