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 | Interest on Fixed Deposit | Tenure |
| SBI | 3.00% – 6.50% | 7 days to 10 years |
| Canara Bank | 4.00% – 6.70% | 7 days to 10 years |
| HDFC | 3.00% – 7.00% | 7 days to 10 years |
| Post office | 6.90% – 7.50% | 12 months to 120 months |
| ICICI Bank | 3.00% – 6.90% | 7 days to 10 years |
| Axis Bank | 3.50% – 7.00% | 7 days to 10 years |
| IDFC First Bank | 3.50% – 7.00% | 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 rate offered by Canara Bank FD on a 1-year FD is 5.25% whereas for a 5 year 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 | FD Interest Rate for General Citizens | Senior Citizen FD Interest Rates |
| SBI | 3.00% – 6.10% | 3.50% – 6.90% |
| ICICI Bank | 3.00% – 6.25% | 3.50% – 6.95% |
| HDFC Bank | 3.00% – 6.25% | 3.50% – 7.00% |
| Axis Bank | 3.50% – 6.50% | 3.50% – 7.25% |
| IDFC First Bank | 3.50% – 6.00% | 4.00% – 6.50% |
| Kotak Bank | 2.75% – 6.20% | 3.25% – 6.70% |
| Bank of Baroda | 3.00% – 5.65% | 3.50% – 6.65% |
| Indian Bank | 2.80% – 6.30% | 2.80% – 7.05% |
| IDBI Bank | 3.00% – 6.10% | 3.50% – 6.85% |
| Citibank | 1.85% – 3.50% | 2.35% – 4.00% |
| PNB | 3.50% – 6.10% | 4.00% – 6.90% |
| Indian Overseas Bank | 3.60% – 6.40% | 4.10% – 6.90% |
| Bank of India | 3.25% – 5.30% | 3.75% – 5.80% |
| Bank of Maharashtra | 2.75% – 5.75% | 3.25% – 6.25% |
| Canara Bank | 3.25% – 6.50% | 3.25% – 7.00% |
| Punjab and Sind Bank | 2.80% – 6.10% | 3.30% – 6.60% |
| Central Bank of India | 2.75% – 6.25% | 3.25% – 6.75% |
| UCO Bank | 2.55% – 5.30% | 2.80% – 5.80% |
| Union Bank of India | 3.00% – 6.70% | 3.50% – 7.20% |
| Karnataka Bank | 5.25% – 5.80% | 5.60% – 5.80% |
| Jammu And Kashmir Bank | 3.50% – 6.00% | 4.00% – 6.50% |
| DBS Bank | 2.50% – 6.25% | 2.50% – 6.75% |
| Karur Vysya Bank | 4.00% – 6.10% | 6.70% – 6.60% |
| Yes Bank | 3.25% – 6.75% | 3.75% – 7.50% |
| Standard Chartered Bank | 2.75% – 6.10% | 2.75% – 6.60% |
| Federal Bank | 3.00% – 6.00% | 3.50% – 6.65% |
| IndusInd Bank | 3.50% – 6.25% | 4.25% – 7.00% |
| RBL Bank | 3.25% – 5.75% | 3.75% – 6.25% |
| HSBC Bank | 2.50% – 6.00% | 3.00% – 6.50% |
| DCB Bank | 3.75% – 7.00% | 4.25% – 7.50% |
| Bandhan Bank | 3.00% – 5.60% | 3.75% – 6.35% |
| South Indian Bank | 2.65% – 6.00% | 3.15% – 6.50% |
All the banks usually offer slightly higher interest rates than what is offered to general citizens. However, to get a senior citizen account and avail of the benefits, one has to submit age proof. The deposited money moves in between the savings account and the 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 their savings account.
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
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
Where,
I = A – P
A = Maturity amount
P = Principal amount
r = rate of interest
t = Tenure
n = Compounded interest frequency
I = Interest earned
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:
A Flexi deposit offers the depositor with the facility of linking his/her deposit account with a savings bank account.