Best Fixed Deposit to Invest in India

12 January 2023
6 min read

A fixed income savings account, where you deposit money for a decided period with an already fixed interest rate is your fixed deposit. Fixed deposits are offered by all the significant banks and money-related foundations. In this plan, you can contribute a particular amount, and on the amount contributed, you will get a fixed interest.

Investing in a fixed deposit means you cannot withdraw your money invested before the maturity period. People who choose to put their funds into fixed deposits should pick a term between 7 days to 10 years. And the tenure you choose will pre-determine your interest rate. The investor will be benefited from the interest on the amount on a month-to-month or quarterly premise.

Best Fixed Deposit Schemes To Invest In India in 2023

Let us see which bank is best for fixed deposit investment with their respective FD interest rates here in this table-

Banks Offering FD

Interest  Rate

Senior Citizen Interest Rate

Tenure

AXIS Bank

3.50-6.10%

3.50-6.85%

7 days-10 years

Bandhan Bank 

3.00% - 5.50%

3.75% - 6.25%

7 days - 10 years

Bank of Baroda

3.00% - 5.65%

3.50% - 6.65%

7 days - 10 years

Canara Bank

3.25% - 7.00%

3.25% - 7.50%

15 days - 10 years

HDFC Bank

3.00% - 4.00%

3.50% - 4.50%

33-99 months

ICICI Bank

3.00% - 6.00%

3.50% - 6.60%

7 days -10 years

Kotak Bank

2.50% - 5.25%

3.00% - 5.75%

7 days - 10 years

Punjab National Bank

3.00%-5.75%

3.50%-6.25%

1-10 years

State Bank of India

3.00% - 5.85%

3.50%-6.65%

7 days-10 years

Union Bank

3.00% - 6.70%

3.50% - 7.20%

7 days - 10 years

Factors To Consider Before Investing in Fixed Deposits

Here are a few things you should be aware of before choosing to invest in fixed deposits and decide which bank is best for FD-

  • Deposit Limit

The first factor to consider is the deposit limit. The deposit limit refers to the maximum amount a bank can offer in a fixed deposit. This is because banks often use this amount as a benchmark when assessing whether or not to offer you a fixed deposit.

You will have to pay an upfront fee if you want to open your account with a larger balance than the bank allows.

  • Interest Rates

The next thing you need to consider while investing in fixed deposits is the interest rates different banks offer. The interest rates charged by different banks can vary depending on their ratings and financial strength.

For example, some banks may charge lower interest rates than others because they have more branches or because their rating is lower than others’ ratings. Hence, it is necessary to analyse the best fixed deposit rates before making an investment choice.

  • Liquidity

Another important factor to consider before investing in fixed deposits is liquidity. This means how quickly your money will be available when needed. In addition, you should ensure that the bank has enough cash reserves to pay out your fixed deposit when it matures (after a certain period).

  • Tax Benefits

A fixed deposit is a good option if you want to benefit from a tax deduction on your earnings. The Government provides an interest rate deduction in the form of tax, which you can claim as an exemption from Income Tax. The amount of interest you can claim depends on your income and other factors.

  • Tenure

Before investing in the best fixed deposit plan, the tenure of a fixed deposit is one thing you should consider beforehand. Before investing in any financial instrument like fixed deposits, you must know how long your money will remain in the bank for safe keeping and its interest rates.

Top Fixed Deposit Schemes To Invest In India: Overview

1) AXIS Bank

Axis Bank Limited is a renowned Indian Banking and financial services company headquartered in Mumbai, Maharashtra. It is regarded as the third-largest private sector bank in India.

Axis Bank provides multiple fixed deposit options to its customers to secure a specific part of their savings for a fixed tenure. The competitive Axis Bank Fixed Deposit interest rates help depositors to earn more returns by safeguarding their money and to use them judiciously in the future.

Customers have to deposit the minimum deposit amount at the time of opening the account. Furthermore, withdrawal of the FD amount is not allowed until the maturity period. As a result, Axis Bank is often considered one of the best banks for fixed deposit investment.

2) Bandhan Bank

Bandhan Bank Limited is an India-based banking company. The Company’s segments include Treasury, Retail banking, and Corporate/Wholesale Banking. The Treasury segment consists of investments in sovereign securities and trading operations and has the central funding unit.

The Retail banking segment includes lending to individuals/small businesses through the branch network and other delivery channels subject to the orientation, nature of the product, the granularity of the exposure, and low value of individual exposure thereof.

3) Bank of Baroda

Bank of Baroda is engaged in providing banking and financial services in India. Its segments include Treasury, Corporate / Wholesale Banking, Retail Banking, and Other Banking Operations. Its geographical part includes Domestic Operations and Foreign Operations.

It offers personal banking services, which include savings accounts, current accounts, and term deposits. It is a popular choice and is one of the banks that provide the best fixed deposit rates in India.

4) Canara Bank

Canara Bank Ltd. is an India-based bank. The Bank's segments include Treasury Operations, Retail Banking Operations, Wholesale Banking Operations, Life Insurance Operations, and Other Banking Operations.

The Bank provides personal banking, corporate banking, non-resident Indian banking, Internet banking, and micro, small and medium enterprises (MSME) banking services. Its retail lending operations include education loans, vehicle loans, housing loans, and other personal loans. 

5) HDFC Bank 

HDFC Bank Limited (the Bank) is an India-based private sector bank. The Bank caters to a range of banking services covering commercial and investment banking on the wholesale and transactional/ branch banking on the retail side.

The Bank's Treasury segment primarily consists of net interest earnings from the Bank's investment portfolio, money market borrowing and lending, gains or losses on investment operations, and accounts for trading in foreign exchange and derivative contracts. HDFC Bank is often listed as the best FD scheme to invest in India.

You may also want to know the 7 Best Fixed Deposit Strategies to Follow

Conclusion

A fixed deposit is the correct choice if you have a large amount of money saved to invest. Fixed deposits and recurring deposits are investments without risk while MIS has high risk.

While FDs are safe investments, to decide which one to opt for one must look into certain factors like the surety of earnings, risk calculations, cash earnings, payouts, etc is tricky. One must always plan such investments by researching different schemes and benefits and choosing the most rewarding scheme.

A Fixed deposit calculator can help you select a suitable scheme and make investments according to your affordability. You can easily calculate your FD interest rates accurately and know how the investment you are choosing will flow within time before you even make any decision. 

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here
Research Analyst - Bavadharini KS

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