Fixed Deposit (FD) Interest Rates
Compare Fixed Deposit Interest Rates available on Moneycontrol with your Banks and NBFCs. Analyze each fixed deposit in depth and make informed decisions using FD calculator and other comprehensive tools. Begin your journey towards smart investing with Moneycontrol today.
- Best Rates
- 2 Years & below
- 2 to 4 Years
- 4 Years and above
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Why Invest in FD?
Fixed deposits are a safe haven for your money as they come with guaranteed returns and are free from market fluctuations. They are pretty flexible as you can choose among a wide range of tenures and also avail overdraft facility if needed. In case of emergencies, you can withdraw your FDs if there’s no lock-in period involved. FDs also come with tax-saver options that allow you to claim the amount invested under section 80C of the Income Tax act.
How to open a Fixed Deposit?
You can easily open a fixed deposit online by using the mobile app or website of your preferred fintech, bank or NBFC. Here are the steps you need to follow to open an FD online:
| 1. | Log in to the mobile app or website and visit the FD section. |
| 2. | Enter the amount you want to invest in FD. |
| 3. | Choose the type of FD – Regular, Tax Savings, Senior Citizen, Flexi, etc. |
| 4. | Choose a tenure as per your needs and based on the interest rates offered. |
| 5. | Confirm all details such as name, FD amount, tenure, debit account, maturity instructions, nominee details and others. |
If you are opening an FD with a bank or NBFC with whom you don’t already have an account, you will need to complete the KYC formalities before you proceed.
Types of Fixed Deposits
Regular Fixed Deposit :
This is the most common type of fixed deposit where you invest your amount for a predetermined tenure and rate of interest.Tax Saver Fixed Deposit (FD) :
This type of FD lets you save tax by claiming the amount invested under section 80C of the Income Tax Act. It comes with a lock-in period of 5 years.Floating Rate Fixed Deposit :
This type of FD has its interest rate linked to a reference rate, like the RBI’s Repo Rate or Treasury Bill yield. It allows you to take advantage of higher interest rates without closing and re-booking your Fixed Deposits.Flexi FD :
It allows you to link your FDs with your savings or current account. It uses the auto-sweep feature to transfer the excess balance from your account to a fixed deposit (FD) account.Senior Citizen Fixed Deposit :
As the term suggests, individuals above the age of 60 years can invest in FDs for a rate of interest that is usually 0.50% higher than regular Fixed Deposit rates. Some banks/NBFCs also run special schemes for super senior citizens i.e. those above the age 80 years.Corporate Fixed Deposit :
These FDs are offered by Housing Finance Companies (HFCs) and Non-Banking Financial Companies (NBFCs) and have interest rates higher than regular FDs.What are Fixed Deposit Interest Rates?
Fixed deposit interest rates vary depending on the bank/NBFC you are investing with, the tenure of investment, the amount invested, etc. Most banks offer interest rates between 4.00% to 7.50%* on FDs (inclusive of Sr. citizen rates). On the Moneycontrol app, you can earn up to 9.10% on your FDs. Compare the interest rates across various banks/NBFCs using the table shared above.
*FD interest rates offered by a popular nationalized bank have been taken as reference.
Bank Fixed Deposit Interest Rates – Special Features
Many banks/NBFCs offer an additional interest rate of around 0.5% to senior citizens. You can also avail of special schemes that offer higher returns. The special schemes are for a predetermined tenure and may be non-callable, i.e. they cannot be withdrawn before their maturity.
Important Terms Related to Fixed Deposit Interest Rates
Here’s a quick guide on important terms related to fixed deposits you need to be familiar with :
| 1. | Tenure:The time duration for which you are investing in an FD. Some banks/NBFCs may also term it as 'tenor'. |
| 2. | Maturity:The date on which you will get back your principal and interest that was determined at the start of your FD. |
| 3. | Premature closure:This is when you close your FD before its date of maturity. Usually, it comes with a lower interest payout. You will not be able to prematurely close your FD if it has a lock-in period. |
| 4. | Annual yield:It is the effective annual return you'll earn on your FD, considering the compounding frequency– quarterly or annual. It offers a better comparison of your investment options. |
| 5. | Interest payout:It determines how often you receive the interest earned on your FD – monthly, quarterly, half-yearly, yearly, or at maturity. If the duration of your FD is low, you may not get the monthly payout option. |
Factors affecting FD interest rates
Tenure of deposit:Usually, the best interest rates are offered for FDs with a tenure of around 2 years. However, some banks or NBFCs might offer high interest rates for FDs with a tenure of around 1 year as well. |
Investment amount:Banks and NBFCs offer higher FD interest rates for deposit amounts above a certain threshold. For example, a certain bank may offer higher interest rates for deposit amounts greater than Rs. 2 cr. |
Senior citizen status:Banks and NBFCs offer higher FD interest rates for senior citizens. The interest rates are around 0.5% higher than the interest rates applicable to regular customers. |
Repo rate:The repo rate announced by the RBI impacts the banking rates, including the FD interest rates. The RBI typically conducts six bi-monthly meetings in a financial year, where it decides upon such important economic indicators. |
Special schemes:Occasionally, some banks run special schemes that offer higher FD interest rates for a set tenure. For example, a particular bank may offer a high interest rate on FDs with a tenure of say 400 days. |
Taxation on Fixed Deposit Interest Rates
Interest earned on FDs is taxable. However, you can get an exemption on FD interest up to Rs. 40,000 per financial year if you are a regular customer and up to Rs. 50,000 if you are a senior citizen. If your income doesn’t fall in the taxable bracket, you don’t need to pay any tax on your FD interest income. However, you need to submit either Form 15G or Form 15H to your bank to avoid the TDS deduction.
Fixed Deposit Investment Tips
Explore your options:Compare interest rates offered by various banks and NBFCs before choosing an FD. |
Consider your goals:While FDs are one of the most popular investment options in India, make sure you are clear about your goals while investing in FD. Typically, people in FDs for their safety aspects and as a part of portfolio diversification. |
Read the fine print:Make sure you are aware of any terms associated with your FD investments. For example, some FDs might come with a lock-in period. |
Annual yield:It is the effective annual return you'll earn on your FD, considering the compounding frequency– quarterly or annual. It offers a better comparison of your investment options. |
Interest payout:It determines how often you receive the interest earned on your FD – monthly, quarterly, or at maturity. If the duration of your FD is low, you may not get the monthly payout option. |