Which Bank has the Highest Interest Rate for Fixed Deposit?

There have been back to back changes in the interest rates by the Reserve Bank of India, which is good news for people investing in FDs.

A fixed deposit is the simplest form of financial investment. You can create a fixed deposit with a bank or NBFC (Non-Banking Financial Institution) as per your convenience. The rate of interest paid on fixed deposits is higher than the interest paid on savings bank account.

SBI's interest rate on regular FDs ranging from 6.7 to 6.75 percent per annum and PNB's interest rate for similar FDs is 6.75 percent. Private Banks like ICICI Bank offer returns at 6.6 to 6.75 percent and HDFC Bank offers interest on FDs at the rate of 7.25 percent.

You can earn interest on the monthly, quarterly, half-yearly or annual basis as per your requirement. It is also possible to choose a cumulative option in which case the principal and interest will be paid on the maturity date.

The Best interest rate is offered in short term and medium term FDs.

Fixed Deposit Interest Rates by Different Banks

Bank

Tenure

 Interest rate

SBI

7 days to 10 years

5.75% to 6.85%

ICICI Bank

7 days to 10 years

4% to 7.25%

Punjab National Bank

7 days to 10 years

5.70% to 6.85%

HDFC Bank

7 days to 10 years

3.5% to 7.40%

Axis Bank

7 days to 10 years

3.5% to 7.25%

Union Bank of India

7 days to 10 years

5.0 % to 6.85%

Fixed Deposit Rates Offered by Different Banks

SBI Fixed Deposit Interest Rates

SBI is one of the largest public sector banks in the country. SBI FD Rates will be revised as per the monetary policy announced by the Reserve Bank of India.

The following interest rates are applicable with effect for regular fixed deposits:

Period

Interest Rate (Per Annum)

7 days to 45 days

5.75

46 days to 179 days

6.25

180 days to 210 days

6.35

211 days to < 1 year

6.40

1 year  to < 2 years

6.70

2 years to <3 years

6.75

3 years to <5 years

6.80

5 years and up to 10 years

6.85

SBI offers 0.5% higher rate of interest than regular deposits for senior citizens.

SBI will pay a higher rate of interest for staff and pensioners. The interest rate will be 1% above the interest rate applicable to the general public. SBI senior citizen resident Indian pensioner will get the benefit of staff interest rate of an additional 1% plus the senior citizen interest rate of an additional 0.5%.

The interest rates will be applicable for fresh deposits and renewals of maturing deposits.

ICICI Bank Fixed Deposit Interest Rates

Period

Interest rate

7 days to 14 days

4%

15 days to 29 days

4.25%

30 days to 45 days

5.5%

46 days to 60 days

6%

61 days to 90 days

6.25%

91 days to 120 days

6.25%

121 days to 184 days

6.25%

185 days to 289 days

6.50%

290 days to <1 year

6.75%

1 year to 389 days

6.90%

390 days up to  2 years

7.10%

2 years 1 day up to 3 years

7.50%

3 years 1 day up to 5 years

7.25%

5 years 1 day up to 10 years

7.00%

5 years (80C FD)

7.25%

ICICI Bank offers 0.5% additional interest for senior citizen fixed deposit receipts. The interest rates are different for domestic, NRO, and NRE deposits. The interest will also differ based on the amount.

ICICI Bank offers fixed deposits with withdrawal option and without withdrawal option. There will be little higher interest for fixed deposits without withdrawal option.

For NRE deposits, the minimum tenure is 1 year and the maximum tenure is 10 years.

Axis Bank Fixed Deposits

Axis bank offers fixed deposit facility online or offline. The interest rates are based on the tenure and amount. For senior citizens, the bank pays a higher rate of interest at 0.65% above the regular deposits.

Period

Interest rate (per annum)

B/w 7 and 14 days

3.50

B/w 15 and 29 days

3.50

B/w 30 and 45 days

5.5

B/w 46 and 60 days

6.25

B/w 61 days  and < 3 months

6.25

B/w 3 months and < 4 months

6.25

B/w 4 months and < 5 months

6.25

B/w 5 months and < 6 months

6.25

B/w 6 months and < 7 months

6.75

B/w 7 months and < 8 months

6.75

B/w 8 months and < 9 months

6.75

B/w 9 months and < 10 months

7.00

B/w 10 months and < 11 months

7.00

B/w 11 months  and < 1 year

7.00

B/w 1 year and < 1 year 5 days

7.25

B/w 1 year 5 days and < 1 year 11 days

7.25

B/w 1 year 11 days and < 13 months

7.25

B/w 13 months and < 14 months

7.30

B/w 14 months and < 15 months

7.25

B/w 15 months and < 16 months

7.25

B/w 16 months and < 17 months

7.25

B/w 17 months and < 18 months

7.25

B/w 18 months and < 2 years

7.25

B/w 2 years  and < 30 months

7.25

B/w 30 months and < 3 years

7.25

B/w 3 years and < 5 years

7.25

B/w 5 years and 10 years

7.00


The FD Interest Rates are high for senior citizens. The bank implements a different type of interest rates for deposits above 1 crore and less than 5 crores. The interest rates will be revised on regular basis as per the monetary policy of the RBI.

Different Types of Fixed Deposits To Invest Your Money

There are different types of fixed deposits. If you are an Indian resident, you can choose to invest in fixed deposits as per your financial needs.

  1. Standard Fixed Deposits - These are simple fixed deposits and there are no complications in the creation or withdrawal of deposits. You will deposit a fixed sum of money for a predetermined period of time. The rate fixed by the bank will be paid to the customer as per the terms and conditions.

The standard fixed deposits are secure and you can invest very easily by approaching the bank or by creating an online account.

  1. Special Fixed Deposits - To earn a higher interest rate, you should go for special fixed deposits. It is possible to take a loan on fixed deposits. You can take a loan to the extent of 90% of the principal. The rate of interest on the loan will be 1% to 2% higher than the interest paid on the fixed deposit.
  2. Tax-saver Fixed Deposits - You can opt for fixed deposits to get regular returns or payment after the maturity date. With tax-saving fixed deposits, you will get income tax exemption up to Rs. 1.5 lakh per year under Section 80C. Banks will impose a minimum of 5-year lock-in period to get income tax benefits.

It is not possible to withdraw funds from a tax-saver fixed deposit. However, you can opt for monthly, quarterly, half-yearly or annual interest payment option. The principal amount will be intact and you will get money on regular basis. The income generated by the tax-saver fixed deposit should be added to the annual total income and the tax should be paid as per the income tax slab.

Reasons to Invest In Bank Fixed Deposits?

  • Security - FDs offer fixed returns after a specific period. There will be a risk with other kinds of investments such as mutual funds and shares of a company
  • Liquidity - Fixed deposits can be used to fulfill your short or medium-term needs. If you go for tax-saving fixed deposits, you can fulfill your long-term needs.
  • No Risk Involved - If you cannot afford to take a risk on your investment, fixed deposit is the ideal option. It is possible to set realistic expectations with the fixed deposit. To break the market volatility, you should invest in long-term deposits.
  • Higher interest rates for senior citizens - Most of the banks offer higher interest rates for senior citizens. The interest rate variation will be in between 0.5% and 0.65% than the regular deposits. Hence, it is a plus point for senior citizens to save money as per their current and future needs.

Fixed deposits will help you save money as per your future needs and there is great flexibility offered by these deposits. Even though FD interest rates are revised on regular basis, the interest committed by the bank at the time of creation of the deposit will be honored by the bank. With liquidity, loan option, and income tax saving potential, fixed deposits should get space in your investment portfolio.

Over to You

Conservative investors who do not want any volatility in their investment returns can invest their money in FD. While choosing term deposits, it is important that you consider the pros and cons of every bank and carefully read the fine print. However, if you wish to earn maximum returns, it is advisable that you ladder your funds across different tenures.