Secure Your Savings: Grow Your Wealth with Confidence!
A Fixed Deposit (FD) is a popular investment option offered by banks and financial institutions that allows individuals to invest a lump sum amount for a fixed tenure at a predetermined interest rate. It is an ideal choice for conservative investors seeking stable returns over a specified period.
Fixed Deposit Interest Rates in India
According to a recent survey by the Securities and Exchange Board of India (SEBI), 95% of Indian investors opt for fixed deposits (FDs) as their preferred investment tool. Despite the availability of other lucrative investment options, FDs stand out due to their stability and the attractive interest rates offered by banks and Non-Banking Financial Companies (NBFCs). The certainty of returns and competitive FD rates make it a popular choice among investors.
FD Interest Rates from Leading Banks
If you’ve decided to go for fixed deposits, it’s essential to choose a bank that provides the best rates. Doing some research by checking the interest rates on various banks’ websites can be time-consuming. To help you out, we have curated a list of some of the top banks offering competitive FD interest rates for deposits below INR 5 crores.
| Bank Name | For General Citizens (p.a.) | For Senior Citizens (p.a.) |
|---|---|---|
| Axis Bank | 3.00% to 7.10% | 3.50% to 7.60% |
| Bajaj Finserv | 7.40% to 8.05% | 7.65% to 8.30% |
| Bandhan Bank | 3.00% to 7.85% | 3.75% to 8.35% |
| Bank of Baroda | 4.25% to 7.25% | 4.75% to 7.75% |
| Bank of India | 4.50% to 7.05% | — |
| Canara Bank | 4.00% to 6.85% | 2.90% to 6.25% |
| CITI Bank | 1.85% to 3.50% | 2.35% to 4.00% |
| DCB Bank | 3.75% to 8.00% | 4.25% to 8.50% |
| Deutsche Bank | 3.00% to 8.00% | 3.00% to 8.00% |
| Equitas Small Finance Bank | 3.50% to 8.25% | 4.00% to 8.75% |
| HDFC Bank | 3.00% to 7.15% | 3.50% to 7.75% |
| ICICI Bank | 3.00% to 7.25% | 3.50% to 7.65% |
| IDFC FIRST Bank | 3.00% to 7.50% | 3.50% to 8.00% |
| IndusInd Bank | 3.50% to 7.50% | 4.25% to 8.25% |
| Jana Small Finance Bank | 3.00% to 8.50% | 3.50% to 9.00% |
| Kotak Bank | 2.75% to 7.25% | 3.25% to 7.80% |
| SBI (State Bank of India) | 3.00% to 7.00% | 3.50% to 7.60% |
Senior Citizens and FD Benefits
For senior citizens, fixed deposits come with added advantages. Financial institutions usually offer higher interest rates for this group, typically between 0.25% to 0.50% more than regular rates. In addition to better rates, senior citizens also enjoy certain tax exemptions. No tax is deducted on interest earnings of up to INR 50,000 annually for senior citizens. For others, the tax deduction limit is capped at INR 40,000 per year. This makes FDs a more tax-efficient option for the elderly.
Tax-Saving Fixed Deposit Schemes
If you are looking for tax-saving investment options, fixed deposits provide an additional benefit. Under the tax-saving scheme, you can invest up to INR 1.5 lakh in FDs and get tax deductions under Section 80C of the Income Tax Act. Below are some of the top banks and their tax-saving FD interest rates for both general citizens and senior citizens:
| Bank Name | For General Citizens (p.a.) | For Senior Citizens (p.a.) |
|---|---|---|
| Axis Bank | 5.25% to 5.75% | 6.25% to 6.25% |
| Bank of Baroda | 6.50% to 6.50% | 7.15% to 7.50% |
| Canara Bank | 6.70% to 6.70% | 6.70% to 6.70% |
| Citibank | 3.50% to 3.50% | 4.00% to 4.00% |
| Federal Bank | 6.60% to 6.60% | 7.25% to 7.25% |
| HDFC Bank | 5.30% to 5.30% | 5.80% to 5.80% |
| IDFC First Bank | 7.00% to 7.00% | 7.50% to 7.50% |
| Punjab National Bank | 6.50% to 6.50% | 7.00% to 7.00% |
| RBL Bank | 7.10% to 7.10% | 7.60% to 7.60% |
These fixed deposit schemes not only provide a secure investment option but also offer considerable tax savings, making them an attractive proposition for risk-averse investors.
Features of Fixed Deposits
- Dependable Returns: Fixed deposits (FDs) provide guaranteed returns at the time of maturity, ensuring financial security.
- Safe Investment Tool: FDs are not affected by market fluctuations, making them one of the safest investment options.
- Fixed Deposit Rates: Interest rates typically range from 2.3% to 7.75%, with senior citizens receiving an additional 0.5-1%.
- Flexibility: You can withdraw funds or increase your deposit in multiples of ten, offering flexibility for investors.
- Loan Against FD: FDs allow you to take out loans without withdrawing from your deposit, making them useful for financial emergencies.
Factors Affecting FD Interest Rates
- Investment Time Frame: Longer tenures generally offer higher interest rates.
- Invested Amount: Larger amounts often result in higher interest rates.
- Renewals: Auto-renewal can secure higher interest rates without the need to track maturity dates.
- Age of Investor: Senior citizens typically receive higher interest rates, often around 0.35% more than others.
- Economic Conditions: National economic policies can impact FD interest rates.
Tax Implications of Fixed Deposit Interest
- Income from FDs is taxable under “Income from Other Sources.”
- TDS is deducted only if the interest income exceeds INR 40,000 annually.
- Submitting Form 15G or 15H at the start of the fiscal year can prevent TDS deductions.
Corporate Fixed Deposit Ratings
Credit ratings for corporate FDs are assigned by agencies like CRISIL and ICRA to assess credibility and safety.
- CRISIL Ratings: Range from FAAA (highest safety) to FD (default).
- ICRA Ratings: Range from MAAA (highest credit quality) to MD (lowest credit quality).
Top 5 Corporate FD Rates in India – 2024
| Company Name | 1-Year Rate | 3-Year Rate | 5-Year Rate | Duration | Senior Citizen Rate |
|---|---|---|---|---|---|
| Shriram Transport Finance Co. Ltd. | 6.31% | 7.48% | 7.62% | 12 to 60 months | 0.5% |
| Shriram City Union Finance Co. Ltd. | 6.31% | 7.48% | 7.62% | 12 to 60 months | 0.5% |
| Muthoot Capital Services Ltd. | 6.25% | 6.75% | 7.25% | 12 to 60 months | 0.25% |
| Bajaj Finance Ltd. | 6.2% | 7.4% | 7.4% | 12 to 60 months | 0.25% |
| Kerala Transport Development Finance Corp. Ltd. | 6% | 6% | 5.75% | 12 to 60 months | 0.25% |
Investing in FDs offers a secure, risk-free way to build a financial corpus while enjoying stable returns over time.