A fixed deposit (FD), also known as a 'time deposit' or 'term deposit,' is an investment where you can put your extra money away for a set period. During this time, you earn a fixed amount of extra money regularly or at the end. Many people like FDs because they give a sure income and protect your money. They're also good for saving for short-term goals or emergencies, or for retirement.
Currently, the interest rates for fixed deposits (FDs) in scheduled banks from 2.50% per annum to 9.00% per annum for regular customers. These rates apply to deposit periods ranging from 7 days to 10 years. Small Finance Banks and Non-Banking Financial Companies (NBFCs) generally offer the highest FD interest rates. Next in line are Public Sector Undertaking (PSU) Banks and large Private Sector Banks. However, certain Private Sector Banks such as Bandhan Bank, DCB Bank, Tamilnad Mercantile Bank, RBL Bank, IDFC First Bank, IndusInd Bank, Yes Bank, SBM Bank, CSB Bank, and Federal Bank offer even higher interest rates for certain FD amounts compared to other Private Sector Banks.
| Small Finance Banks | ||||
|---|---|---|---|---|
| Bank Name | Interest Rates (% p.a.) | |||
| Highest slab | 1-year tenure | 3-year tenure | 5-year tenure | |
| AU Small Finance Bank | 8.00 | 6.75 | 7.50 | 7.25 |
| Capital Small Finance Bank Limited | 7.60 | 7.50 | 7.15 | 7.10 |
| Equitas Small Finance Bank | 8.50 | 8.20 | 8.00 | 7.25 |
| ESAF Small Finance Bank | 8.25 | 6.00 | 6.75 | 6.25 |
| Fincare Small Finance Bank | 8.61 | 7.65 | 8.11 | 8.00 |
| Jana Small Finance Bank | 8.50 | 8.50 | 7.25 | 7.25 |
| North East Small Finance Bank | 8.50 | 7.00 | 7.75 | 6.25 |
| Shivalik Small Finance Bank Limited | 7.80 | 7.80 | 7.50 | 6.50 |
| Suryoday Small Finance Bank | 8.65 | 6.85 | 8.60 | 8.25 |
| Ujjivan Small Finance Bank | 8.25 | 8.25 | 7.20 | 7.20 |
| Unity Small Finance Bank | 9.00 | 7.85 | 8.15 | 8.15 |
| Utkarsh Small Finance Bank | 8.50 | 8.00 | 8.50 | 7.50 |
| Private Sector Banks | ||||
| Bank Name | Interest Rates (% p.a.) | |||
| Highest slab | 1-year tenure | 3-year tenure | 5-year tenure | |
| Axis Bank | 7.20 | 6.70 | 7.10 | 7.00 |
| Bandhan Bank | 7.85 | 7.25 | 7.25 | 5.85 |
| City Union Bank | 7.00 | 6.75 | 6.50 | 6.25 |
| CSB Bank | 7.75 | 5.00 | 5.75 | 5.75 |
| DBS Bank | 7.50 | 7.00 | 6.50 | 6.50 |
| DCB Bank | 8.00 | 7.15 | 7.60 | 7.40 |
| Dhanlaxmi Bank | 7.25 | 6.75 | 6.50 | 6.60 |
| Federal Bank | 7.50 | 6.80 | 7.00 | 6.60 |
| HDFC Bank | 7.25 | 6.60 | 7.00 | 7.00 |
| ICICI Bank | 7.10 | 6.70 | 7.00 | 7.00 |
| IDBI Bank | 7.25 | 6.80 | 6.50 | 6.50 |
| IDFC First Bank | 7.75 | 6.50 | 7.25 | 7.00 |
| IndusInd Bank | 7.75 | 7.75 | 7.25 | 7.25 |
| Jammu & Kashmir Bank | 7.10 | 7.10 | 6.50 | 6.50 |
| Karnataka Bank | 7.25 | 6.95 | 6.50 | 6.50 |
| Karur Vysya Bank | 7.50 | 7.00 | 7.00 | 7.00 |
| Kotak Mahindra Bank | 7.25 | 7.10 | 7.00 | 6.20 |
| Nainital Bank | 7.05 | 6.70 | 6.25 | 5.75 |
| RBL Bank | 8.10 | 7.50 | 7.50 | 7.10 |
| SBM Bank India | 8.25 | 7.05 | 7.30 | 7.75 |
| South Indian Bank | 7.40 | 6.70 | 6.60 | 6.00 |
| Tamilnad Mercantile Bank | 7.25 | 7.00 | 6.50 | 6.50 |
| Yes Bank | 7.75 | 7.25 | 7.25 | 7.25 |
| Public Sector Banks | ||||
| Bank Name | Interest Rates (% p.a.) | |||
| Highest slab | 1-year tenure | 3-year tenure | 5-year tenure | |
| Bank of Baroda | 7.25 | 6.85 | 7.25 | 6.50 |
| Bank of India | 7.25 | 6.50 | 6.50 | 6.00 |
| Bank of Maharashtra | 7.00 | 6.50 | 6.25 | 6.00 |
| Canara Bank | 7.25 | 6.85 | 6.80 | 6.70 |
| Central Bank of India | 7.25 | 6.75 | 6.50 | 6.25 |
| Indian Bank | 7.25 | 6.10 | 6.25 | 6.25 |
| Indian Overseas Bank | 7.10 | 6.90 | 6.50 | 6.50 |
| Punjab & Sind Bank | 7.40 | 6.20 | 6.00 | 6.00 |
| Punjab National Bank | 7.05 | 6.75 | 7.00 | 6.50 |
| State Bank of India | 7.10 | 6.80 | 6.75 | 6.50 |
| UCO Bank | 6.50 | 6.50 | 6.30 | 6.20 |
| Union Bank of India | 7.25 | 6.75 | 6.50 | 6.50 |
Fixed deposit rates as of 19 February 2024
Fixed deposit rates as of 19 February 2024
| Bank Name | Interest Rates (p.a.) | |||
|---|---|---|---|---|
| Highest slab (%) | 1-year tenure (%) | 3-year tenure (%) | 5-year tenure (%) | |
| Deutsche Bank | 8.00 | 7.00 | 8.00 | 7.50 |
| HSBC Bank | 7.25 | 4.00 | 7.00 | 6.00 |
| Standard Chartered Bank | 7.50 | 7.15 | 7.10 | 6.75 |
Fixed deposit rates as of 19 February 2024
| Company Name | Interest Rates (p.a.) | Tenure range | Additional interest rate for senior citizen (p.a.) | ||
|---|---|---|---|---|---|
| 1-year tenure | 3-year tenure | 5-year tenure | |||
| Bajaj Finance Limited | 7.40% | 8.05% | 8.05% | 12-60 months | 0.25% |
| ICICI Home Finance | 7.25% | 7.65% | 7.60% | 12-120 months | 0.25% |
| Kerala Transport Development Finance Corporation | 7.00% | 7.00% | 6.75% | 12-60 months | 0.25% |
| LIC Housing Finance Ltd. | 7.25% | 7.75% | 7.75% | 12-60 months | 0.25% |
| Mahindra Finance | 7.60% | 8.05% | 8.05% | 12-60 months | 0.25% |
| Manipal Housing Finance Syndicate Ltd. | 8.25% | 8.25% | 7.75% | 12-60 months | - |
| Muthoot Capital Services Limited | 7.21% | 8.07% | 8.38% | 12-60 months | 0.25% |
| PNB Housing Finance Ltd. | 7.45% | 7.85% | 7.65% | 12-60 months | 0.25% |
| Shriram Finance Ltd.* | 7.53% | 8.18% | 8.27% | 12-60 months | 0.50% |
| Sundaram Home Finance | 7.45% | 7.75% | 7.90% | 12-60 months | 0.50% |
| Sundaram Finance | 7.45% | 7.75% | - | 12 to 36 months | 0.35% |
*At Monthly Rests. Additional interest of 0.25% p.a. is ap
Usually, customers book FD in the bank where they already maintain a bank account. As banks already have the KYC details of their existing customers, new documents might not be needed to open a fixed deposit account.
Customers can open a fixed deposit account online through the bank’s net banking platform or through its mobile application such as YONO SBI.
To open a fixed deposit offline, customers can visit the banks and financial institutions where they already maintain their bank accounts.
To choose the right fixed deposit scheme, know your investment horizon and liquidity requirements. When making the choice, consumers should also compare prevailing FD interest rates across banks and check for interest pay-out options, special interest schemes and additional facilities such as secured credit cards, loan against FD, sweep-in and sweep-out facility, etc.
Reasons to investment in FD are as below:
When choosing a fixed deposit scheme, factor in your liquidity, investment objective, investment horizon, current FD interest rates and interest pay-out options. Additionally, check for special interest schemes and additional facilities such as secured credit cards, loan against FD, sweep-in and sweep-out facility, etc.
Resident individuals, private and public limited companies, Hindu Undivided Families (HUF), partnership firms, societies, governments, local bodies, etc. can book fixed deposits.
The tenure of FD schemes usually varies from 7 days to as long as 10 years. However, NBFCs offer Fixed Deposit investment for a period ranging from 12 months to 60 months and HFCs offer Fixed Deposit tenures of 12 months to 120 months of fixed deposits.
Tax-saving fixed deposit schemes have a lock-in period of 5 years.
Yes. The interest earned on an FD is taxable. However, as per the Section 80C of the Income Tax Act, 1961, investors can claim deductions for up to Rs. 1.5 lakh per financial year.
Most of the banks provide senior citizens with preferential FD rates (e.g., 0.50% extra). For banks like Axis Bank, preferential interest rates are awarded at different proportions for select tenure.
The minimum amount set by banks and NBFCs for opening a fixed deposit is generally set at Rs. 1,000. Public sector banks may have lower minimum deposit criteria while some large private sector banks have set minimum deposit requirement of Rs 5,000. However, a tax-saving 5-year fixed deposit can be opened with an amount as low as Rs. 100.
TDS @10% is levied on interest income of more than Rs. 40,000 for regular individuals and Rs. 50,000 for senior citizens. For Company/Corporate Fixed Deposits, this limit has been set at Rs. 5,000.
Yes. It is compulsory to quote your PAN when applying for a fixed deposit. However, if you do not have a PAN, you need to submit duly filled Form 60/61 (not being a company or a firm).
Yes. Small finance banks are regulated by the Reserve Bank of India. Also, deposit insurance of up to Rs. 5 lakh by DICGC is provided on these fixed deposits.
The full form of NRE Fixed Deposit is Non-Resident External Fixed Deposit. This Fixed Deposit is for Non-Resident Indians (NRIs). They can deposit their foreign earnings in an Indian Account. Interest earned on an NRE FD is not taxable in India. The account is maintained in INR which means that the money deposited is converted as per the later forex rates.
NRE Fixed Deposit (Non-Resident External) is for NRIs to remit/transfer their foreign earnings to an Indian account. NRO Fixed Deposit (Non-Resident Ordinary) is for NRIs to manage their income earned in India.