IndusInd Bank and RBL Bank offer the best interest rates on 1-year fixed deposits

HDFC Bank and ICICI Bank offer 4.90 percent interest rate on one-year FDs; Standard Chartered Bank offers 5.30 percent interest on one-year deposits 

May 10, 2021 / 11:06 AM IST

In the second wave of the COVID-19 pandemic, it’s important to have a part of your savings for medical emergency in fixed deposits (FDs). Investments in FDs offer liquidity to your portfolio and the amount can be withdrawn when needed. Risk-averse investors should consider FDs due to the safety and assurance of returns.

Despite falling interest rates, you should invest a certain percentage of your portfolio in FDs offering higher returns on one-year FDs. Smaller private banks tend to top the rate chart on fixed deposits, given the competition they face in garnering deposits. However, you should do a thorough risk assessment and due diligence of a bank before investing in its FDs.

Smaller private banks offer higher rates

According to data compiled by BankBazaar,  IndusInd Bank and RBL Bank offer 6.5 percent interest rates on their one-year FDs. These interest rates are higher compared to those offered by foreign and public sector banks.


The interest rates offered by foreign banks Standard Chartered Bank and DBS Bank are 5.30 percent and 4.25 percent on one year FDs.

The interest rates offered by small finance banks are higher compared to leading private banks. Suryoday Small Finance Bank offer 6.75 percent on-year FDs. Equitas Small Finance Bank and Ujjivan Small Finance Bank offers 6.50 percent interest on one-year FDs.

Also read: DCB Bank, Yes Bank and IndusInd Bank offer more than 6.5% interest on tax-saving deposits

Leading private banks such as ICICI Bank and HDFC Bank offer 4.90 percent interest on one-year FDs. Axis Bank offer 5.15 percent interest. Kotak Mahindra Bank offers 4.50 percent interest on one-year deposit, which is the lowest rate among private banks.

Public sector banks such as Union Bank, Punjab & Sind Bank and Bank of India offer 5.25 percent interest on one-year FDs. Established banks such as State Bank of India (SBI) and Bank of Baroda (BOB) offer 5 percent and 4.90 percent interest respectively, on their one-year FDs.

Investments in fixed deposits of up to Rs 5 lakh are guaranteed by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI.

The minimum investment amount varies across banks. In private banks, the amount ranges from Rs 100 to Rs 10,000 and at foreign banks, the sum ranges from Rs 1,000 to Rs 20,000.

Also read: Union Bank, State Bank of India offer education loans at 6.8-6.85%

A note about the table

The data on FDs is as on May 5, 2021, as given in the respective banks’ websites. Interest rates of all listed (BSE) private banks and foreign banks considered for data compilation. Banks for which verifiable data is not available are not considered. The minimum investment amount may vary depending on the type of the term deposit account. For all FDs, quarterly compounding is assumed.
Moneycontrol PF Team
first published: May 10, 2021 11:06 am

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