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Best Fixed Deposit Interest Rates in India

A fixed deposit, also known as an FD, is a type of investment product offered by banks and non-banking finance companies (NBFCs). FDs allow you to invest for a set period of time and receive a fixed interest rate. You know what interest rate you will receive and how much money you will receive at maturity when you invest. You can also choose to receive interest payments on a regular basis.

 

Best FD Rates in India

Fixed deposits are a safe investment option that guarantees consistent interest rates, special interest rates for senior citizens, various interest payment options, no market risks, and income tax deductions.

Best FD Interest Rates 2021 in India for the Top 10 Banks (Below 2 Crores)

As of August 2021, the following are the most recent interest rates offered by top banks for terms ranging from 7 days to 10 years.

Name of Bank For General Citizens (p.a.) For Senior Citizens (p.a)
State Bank of India FD 2.90% to 5.40% 3.40% to 6.20%
ICICI Bank FD 2.50% to 4.40% 2.50% to 4.40%
HDFC Bank FD 2.50% to 5.50% 3.00% to 6.25%
Punjab National Bank FD 2.90% to 5.25% 3.50% to 5.75%
Canara Bank FD 2.90% to 5.25% 2.90% to 5.75%
Axis Bank FD 2.50% to 5.75% 2.50% to 6.50%
Bank of Baroda FD 2.80% to 5.25% 3.30% to 5.75%
IDFC Bank FD 2.75% to 5.75% 3.25% to 6.25%
Bank of India FD 2.85% to 5.05% 3.35% to 5.55%
Punjab and Sind Bank FD 3.00% to 5.30% 3.50% to 5.60%

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Best FD Interest Rates 2021 for Other Popular Banks (Below Rs.2 crore)

Other banks in India’s fixed deposit interest rates for deposits less than Rs.2 crore as of August 2021 are listed below. These are available for terms ranging from 7 days to 10 years.

Name of Bank For General Citizens (p.a.) For Senior Citizens (p.a)
Yes Bank FD 3.25% to 6.50% 3.75% to 7.25%
IndusInd Bank FD 2.50% to 6.00% 3.00% to 6.50%
UCO Bank FD 2.75% to 5.00% 3.00% to 5.50%
United Bank of India FD (now Punjab National Bank) 2.90% to 5.25% 3.50% to 5.75%
Allahabad Bank FD (now Indian Bank) 2.90% to 5.15% 3.40% to 5.65%
Central Bank of India FD 2.75% to 5.00% 3.25% to 5.5%
Indian Bank FD 2.90% to 5.15% 3.40% to 5.65%
Indian Overseas Bank FD 3.40% to 5.25% 4.15% to 6.00%
Bandhan Bank FD 3.00% to 5.00% 3.75% to 5.75%
DBS Bank FD 2.75% to 5.50% Up to 5.50%
Andhra Bank FD (now Union Bank) 3.00% to 5.60% 3.50% to 6.10%
HSBC Bank FD 2.25% to 4.00% 2.75% to 4.50%
Syndicate Bank FD (now Canara Bank) 2.90% to 5.25% 2.90% to 5.75%
Duetsche Bank FD 1.80% to 6.25% 1.80% to 6.25%
SBM Bank FD 2.50% to 6.00% 3.00% to 6.50%
Punjab and Sind Bank FD 3.00% to 5.30% 3.50% to 5.60%

Benefits of Fixed Deposit (FD)

Here are some of the top benefits of an Fixed Deposit (FD):

  • Fixed deposits provide guaranteed returns. When you open an FD, the interest rate you are offered remains constant throughout your tenure. Even if interest rates in the broader market fall, your FD will remain unaffected. As a result, you don’t have to be concerned about the market’s ups and downs.
  • Compound interest will benefit you if you choose an FD with a reinvestment option (which basically means that you will earn interest not just on the principal amount but also on the interest you earn).
  • If you want to use FDs to save taxes, choose the five-year tax-saving FD and take advantage of the exemptions provided by Section 80c of the Income Tax Act.
  • If you already have a savings account, you can open an FD with a few clicks or by visiting your local branch. You don’t have to worry about it after you open it until it matures. You can instruct your account to automatically renew or have the maturity proceeds credited to it.

 

How to Calculate Fixed Deposit Rates?

The amount of interest you can earn on your deposited funds is determined by a variety of factors, including the amount invested, tenure, interest rate, interest computation frequency, and taxation. You can use an FD calculator to calculate the returns on your investment. The entire process of calculating the amount is simple and straightforward. Simply enter the deposit term, the type of FD (reinvestment, quarterly, or monthly payment), the investment amount, the account opening date, and the interest rate.

Factors Affecting Fixed Deposit Rates

Many factors influence FD interest rates, some of which are listed below:

  • Deposit Tenure: The shorter the tenure, the lower the interest rate, and the longer or medium-term the tenure, the higher the interest rate.
  • Deposit Amount: Higher deposit amounts, particularly bulk deposits exceeding Rs.1 crore, will result in higher interest rates.
  • Depositor type: Senior citizens typically receive 0.25 per cent to 0.50 per cent higher interest rates on fixed deposits.

 

FAQs: Best Fixed Deposit Interest Rates

How can I get the most out of my fixed deposit?

Compare fixed deposit rates across different tenures in the same bank and across different banks to get the best returns on your fixed deposit. Make sure it's neither too short nor too long.

Is a fixed deposit taxed?

Yes, the interest on an FD is taxable. TDS is levied on interest earned if it exceeds Rs 5000 per year. However, you can avoid tax deductions by submitting form 15G/H to the bank or NBFC.

Is a fixed-deposit investment a safe option?

Yes, for risk-averse investors looking for a stable investment avenue to grow their savings, an FD is a safe investment option. You can obtain the best FD rates, flexible tenures, and customised periodic payouts. You will also receive guaranteed returns that are unaffected by market fluctuations.

Can I avail loan against my FD?

Because loan against FD is an important feature of fixed deposits, most banks provide this option to their customers. A loan of up to 90% of the deposit amount is possible (may vary as per your bank).

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