One of the best ways to secure your money is by investing in fixed deposits which not only helps you to save money but also helps you to earn a substantial interest in it. Competitive Bank FD interest rates help the depositor to get a good Return on Investment over a fixed tenure. Under the fixed deposit scheme, the depositor deposits the money only once at the time of opening the account. The interest rates offered depends on the bank, deposit amount and the tenure you choose.
At the end of the tenure, the interest accrued is calculated on the principal amount and the total amount is paid back to the depositor. The tenure of fixed deposits may range from 7 days to 10 years. In the next section, we have enlisted some of the banks that offer competitive interest rates.
|Banks||FD Interest Rates||Tenure|
|SBI||2.90% – 5.40%||7 days to 10 years|
|Canara Bank||2.95% – 5.50%||7 days to 10 years|
|HDFC||2.50% – 5.50%||7 days to 10 years|
|PNB Housing Finance||5.90% – 6.70%||12 months to 120 months|
|ICICI Bank||2.50% – 5.50%||7 days to 10 years|
|Axis Bank||2.50% – 5.50%||7 days to 10 years|
|IDFC First Bank||2.75% – 6.00%||7 days to 10 years|
Deposit amount: Banks provide a comparatively lower rate of interest on bulk deposits exceeding Rs. 1. crore and higher rates on deposits less than 1 crore. DHFL Bank is one of the highest interest offering banks and provides an interest rate of up to 9.25% for fixed deposits. The fixed deposit interest rates are determined by changes in the RBI monetary policy such as the repo rate, base rate, internal liquidity position of banks, credit demand, economic conditions, etc. The factors on which the bank FD rates vary are the deposited amount, deposit tenure and the type of depositor.
Tenure of the Deposit: Deposits with shorter tenure are often offered a lower rate of interest than those having a longer tenure. For instance, the highest FD interest rates offered by Canara Bank FD on a 1 year FD is 5.25% whereas for a 5 years FD, it offers 5.30%
Type of the Depositor: All the banks in India offer a comparatively higher interest rate on senior citizens’ fixed deposits. Currently, banks offer a rate of interest ranging from 3.50% – 9.25% on senior citizens FDs depending on the deposit amount and the deposit tenure.
Bank Fixed Deposit Interest Rates – Special Features
- Fixed deposits usually offer higher interest rates and one can get best fd rates in the bank than a regular savings account.
- A fixed deposit account can be any Indian resident including minors and HUFs
- It allows choosing 2 nominees in the application form that are eligible to collect the FD amount by submitting a valid death proof after the demise of the account holder
- Premature withdrawal is not allowed in fixed deposits, hence you cannot withdraw the deposit amount before maturity. However, once can withdraw the amount in case of any emergency by paying a penalty amount.
- Banks also provide a Sweep-in facility on term deposits, which allows the depositor to interlink his/her savings bank account with a fixed deposit account. The benefit of this facility is that it facilitates the auto-transfer of surplus amount from savings account to the FD account. It allows the depositor to earn FD rates on your savings account with an option to break the FD at any point of time and utilize the amount.
- All the banks provide the facility to take loans against FDs to meet any financial emergency. Your deposit acts as the security of the loan taken. One can take a loan up to 75%-95% of the FD amount depending on the bank and the interest rate varies from 1% – 1.5% higher than the FD rate.
Bank FD Interest Rates in India – Regular & Senior Citizen Rates
(Last Updated 12th Jan 2021)
|Bank||FD Interest Rate for General Citizens||Senior Citizen FD Interest Rates|
|SBI||2.90% – 5.40%||3.40% – 6.20%|
|ICICI Bank||2.50% – 5.50%||3.00% – 6.30%|
|HDFC Bank||2.50% – 5.50%||3.00% – 6.25%|
|Axis Bank||2.50% – 5.50%||2.50% – 6.05%|
|IDFC First Bank||2.75% – 5.75%||3.25% – 6.25%|
|Kotak Bank||2.50% – 4.90%||3.00% – 5.40%|
|Bank of Baroda||2.80% – 5.25%||3.40% – 5.80%|
|Indian Bank||2.90% – 5.15%||3.40% – 5.65%|
|IDBI Bank||2.90% – 4.80%||3.40% – 5.65%|
|OBC||3.00% – 5.25%||3.50% – 5.75%|
|Citibank||2.75% – 3.75%||3.25% – 4.25%|
|Allahabad Bank||2.90% – 5.15%||3.40% – 5.65%|
|PNB||3.00% – 5.25%||3.50% – 5.75%|
|PNB Housing Finance||5.90% – 6.70%||6.15% – 6.95%|
|Indian Overseas Bank||3.40% – 5.25%||3.90% – 5.75%|
|Andhra Bank||3.00% – 5.40%||3.50% – 5.90%|
|Bank of India||3.25% – 5.30%||3.75% – 5.80%|
|Bank of Maharashtra||3.00% – 4.90%||3.00% – 5.40%|
|Canara Bank||2.95% – 5.50%||2.95% – 6.00%|
|Punjab and Sind Bank||3.10% – 5.25%||3.60% – 5.95%|
|Central Bank of India||2.75% – 5.00%||3.25% – 5.50%|
|UCO Bank||2.75% – 5.00%||3.00% – 5.50%|
|Union Bank of India||3.00% – 5.40%||3.50% – 5.90%|
|DHFL||7.70% – 8.00%||7.95% – 8.25%|
|Lakshmi Vilas Bank||3.60% – 7.00%||3.60% – 7.50%|
|United Bank of India||3.00% – 5.25%||3.50% – 5.75%|
|Karnataka Bank||3.40% – 5.70%||3.80% – 6.95%|
|Jammu And Kashmir Bank||3.00% – 5.30%||3.50% – 5.80%|
|DBS Bank||2.75% – 5.50%||2.75% – 5.50%|
|Karur Vysya Bank||3.50% – 5.65%||3.50% – 6.15%|
|Yes Bank||3.50% – 6.75%||4.00% – 7.50%|
|Syndicate Bank||2.95% – 5.50%||2.95% – 6.00%|
|Standard Chartered Bank||2.50% – 5.60%||2.50% – 6.10%|
|Dhanlaxmi Bank||3.50% – 5.60%||4.00% – 6.10%|
|Bajaj Finance||6.10% – 6.60%||6.35% – 6.85%|
|LIC Housing Finance||5.50% – 5.60%||5.75% – 5.85%|
|Federal Bank||2.50% – 5.50%||3.00% – 6.00%|
|Corporation Bank||3.00% – 5.40%||3.50% – 5.90%|
|IndusInd Bank||3.25% -7.00%||3.75% – 7.50%|
|RBL Bank||3.25% – 6.40%||3.75% – 6.90%|
|HSBC Bank||2.25% – 4.00%||2.75% – 4.50%|
|DCB Bank||4.75% – 6.95%||5.25% – 7.45%|
|Bandhan Bank||3.00% – 6.00%||3.75% – 6.75%|
|South Indian Bank||3.50% – 5.50%||4.00% – 6.00%|
Best FD Interest Rates Providing Banks in India
Below is the list of banks that provide best FD interest rates for 1 year to 5-year tenure.
|FD Tenure||FD Rate||Banks providing this FD Rate|
|1 year||6.50%||IndusInd Bank|
|2 year||7.00%||IndusInd Bank, Jana Small Finance Bank|
|3 year||7.00%||Jana Small Finance Bank|
|5 year||7.00%||Jana Small Finance Bank|
IndusInd Bank is the topmost bank for 1 year FD as it offers the highest interest rate of 7.00% on deposits of this tenure. For 5 year FD, Jana Small Finance Bank provides the maximum rate of interest which is 7.00%.
Banks Providing Best FD rates for 1-year Tenure
The recent 1 year FD rates range from 4.50% to 7.00%. IndusInd Bank leads with an interest rate of 7.00% for a one year fixed deposit. However, you can compare the following banks if you are thinking to open a 1 year FD.
|1 Year FD Rate||Banks with this rate|
|6.75%||Jana Small Finance Bank|
Banks providing Best FD rates for 2-year Tenure
Indusind Bank tops the list for 2-year bank FD tenure with the highest rate of 7%
|2 Year FD Rate||Banks with this rate|
|7.00%||Jana Small Finance Bank|
|6.75%||Equitas Small Finance Bank|
Banks Providing Best FD rates for 3-year Tenure
|3 Year FD Rate||Banks with this rate|
|7.00%||Jana Small Finance Bank|
|7.00%||Equitas Small Finance Bank|
|6.05%||Ujjivan Small Finance Bank|
|5.65%||Karur Vysya Bank|
Banks Providing Best FD rates for 5-year Tenure
As per the latest trends of bank FD interest rates, 5 year FD rates range from 4.50% to 7.00%. Jana Small Finance Bank is the topmost bank for a 5 year FD with the highest rate of 7.00%.
|5 Year FD Rate||Banks with this rate|
|7.00%||Jana Small Finance Bank|
|6.75%||Equitas Small Finance Bank|
|6.70%||India Post Office|
|6.00%||Lakshmi Vilas Bank|
Month wise Best FD Rates Provided by the Banks
|3 months||Banks with this rate|
|3.75%||Jana Small Finance Bank|
|3.70%||Dena Bank (Now merged with Bank of Baroda)|
|6 months||Banks with this rate|
|4.50%||Jana Small Finance Bank|
|9 months||Banks with this rate|
|6.00%||Jana Small Finance Bank|
Fixed Deposit Interest Rates – Senior Citizens
All the banks usually offer slightly higher interest rates than what is offered to general citizens. However, to get senior citizen account and avail of the benefits, one has to submit the age proof. The deposited money moves in between the savings account and fixed deposit account. It is usually known as Sweep in-Sweep out fixed deposit. This scheme allows the depositor to earn higher interest rates on the surplus amount in your savings account.
- The age of the senior citizen must be 60 or more at the time of opening the account.
- Senior citizens FD tenure ranges from 7 days to 10 years in most of the banks
- A senior citizen FD can give you an interest rate between 0.25% to 0.75% higher than the regular interest
- One can take loans against their senior citizen FD account
- Like other schemes, senior citizen FD also levies penalty in case of premature withdrawal
Important Terms Related to Fixed Deposit Interest Rates
Timely Closure: Timely closure refers to closing the fixed deposit account at the time of its maturity only. When closed upon maturity date, the bank pays back the principal amount with the interest accrued over the tenure chosen.
Breaking FD account: It’s just the opposite of timely closure where the depositor withdraws the entire deposited money before the maturity. Usually, breaking of FD or premature withdrawal is not allowed and is subject bank’s norms; banks levy a penalty at the time of breaking your FD before the maturity date and pays you back the principal amount and the interest at a lower interest rate. However, there are some banks such as Yes Bank and Bank of Maharashtra that waive off the penalty if the withdrawal is due to some emergency.
Partial Withdrawal: As the name suggests, partial withdrawal allows the depositor to withdraw a certain part of the money from the fixed deposit account. You can either use the fund for some emergency or get it deposited in some other bank in case you are getting the best FD rates in the market. Usually, it is allowed in the units of Rs. 1000 and a penalty of 1% is levied by the bank. However, the remaining balance amount continues to earn the original interest rate
FD Interest Rate Calculator
It is obvious that you might want to know how much interest you would earn on your FD upon maturity. It can be easily calculated by using an FD calculator available over the internet and you can find out the total interest you will be earning at the end of the tenure. Alternatively, you can also find out with a formula given below:
A = P * (1+ r/n) ^ n*t
I = A – P
A = Maturity amount
P = Principal amount
r = rate of interest
t = Tenure
n = Compounded interest frequency
I = Interest earned
Taxation on Fixed Deposit Interest Rates
- The income earned from FD is considered as income from other sources and is completely taxable.
- However, banks do not deduct any TDS if the interest income from fixed deposits is less than Rs. 40000 in a year
- You need to submit Form 15G and Form 15H in the bank at the beginning of the financial year. Banks do not deduct TDS once you submit the forms
Tax Saving FD
Tax saver FDs are a special type of deposit scheme under which on can get a tax exemption of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act, 1961. Some of the features of tax-saving FDs are:
- This account has a lock-in period of a minimum of 5 years
- Premature withdrawal or partial withdrawal option is not provided
- Loans facility against FDs is not available
Flexi Fixed Deposit
A Flexi deposit offers the depositor with the facility of linking his/her deposit account with a savings bank account.
Fixed Deposit Investment Tips
- Before investing, one should contemplate on the factors such as maturity, rate of interest, penalty on breaking the FD account before maturity.
- Also, do your research regarding the latest trends in interest rates. If you are planning to re-invest when the interest rates go up, opt for a shorter tenure FD and vice versa
- Before proceeding with the final decision, one should go through the tenure-wise interest rate offered. Sometimes, banks may offer higher interest rates on some selected tenures
- Also, the expenses should be planned carefully and invested by making sure that it does not affect your budget
FD Interest Rates – FAQs
Ques. What is the minimum amount to open an FD account?
Ans. The minimum amount if you open an FD account through mobile banking or net banking is Rs. 5000, But if you visit the nearest branch directly, the minimum investment amount is Rs 10,000.
Ques. What is the minimum tenure for which one can open an FD account?
Ans. One can open a fixed deposit account in banks for a minimum of 7 days and 1 year in NBFCs.
Ques. Can I get generate monthly income or interest from FD account?
Ans. Yes. At the time of opening the account, just opt for the monthly payment of interest, among other options like quarterly, half-yearly, and annual interest payments.
Ques. How is the interest on a Bank Fixed Deposit calculated?
Ans. For Tenures less than 6 months: Interest is calculated on simple interest and is considered on the time period.
For Tenure of 6 months and above: Interest is compounded quarterly, i.e. interest earned on the previous quarter is added to the principal for final interest calculation
For monthly interest payout: The interest is paid at a bit tweaked rate over the standard rate. In case the depositor has chosen a quarterly payout option, the interest will be calculated and paid quarterly.
Ques. How to apply for fixed deposit online?
Ans. Different banks have different procedures to open an FD account online. You can visit the respective bank’s official website and check for FD online opening procedure.
Ques. Can I withdraw my FD amount online before maturity?
Ans. Yes, you can withdraw your FD online before FD maturity but there’s a penalty levied by the banks by paying lower interest rate or charging a penalty for premature withdrawal.
Ques. What is the maximum amount that can be invested in an FD account?
Ans. There is no cap on investment in an FD account; however, it may vary from one bank to the other. For an amount above Rs. 1 crore on fixed deposit account holders can get customized interest rates from their bank.
Ques. How will I receive the interest amount?
Ans. It depends on the chosen investment scheme at the time of opening your fixed deposit account. If you have deposited the money under the traditional scheme, the FD interest will be credited to your savings account on a monthly or quarterly basis.
If it’s deposited under the reinvestment scheme, the interest will be added to the principal amount periodically for reinvestment and will be compounded as per the time. You can opt to receive the interest amount on your FD on a monthly, quarterly or annual basis
Ques. Is the interest earned on an FD includes TDS applicable?
Ans. Tax Deduction at Source or TDS is not applicable to the interest earned up to a bracket of Rs. 5,000 to 10,000 (depending on the financial institution). If the investor’s total income is lower than the taxable limit, tax deduction can be avoided by furnishing Form 15G/15H at the time of opening an FD account.