What is Fixed Deposit (FD) in India?

A fixed deposit in India is given by banks to allow people deposit a fixed sum of money up to a certain term such as 6 months, one year, 5 years etc. The bank provides a fixed amount of interest rate on the sum over the FD tenure. The interest rate tends to be higher than that for savings account. Fixed deposits are known as safe investment option, which also have tax-saving feature.

People usually invest in FD India, because it is risk free and earns one high interest rate on the sum deposited. FD interest rates can differ from bank to bank and depends on the deposit's tenure, RBI regulations and other factors. To find the best FD rates in India, you can check out different FD schemes by banks and compare the rates offered.

The sum deposited is done in total and just once. The customer must open a separate fixed deposit account. The term deposit can range from 7 days to 10 years. Customers can earn several tax benefits on FDs. Learn more about fixed deposit benefits and features at loanbaba.com by reading further.

Important Fixed Deposit Account Features

1. FD receipts are provided at the time of opening the FD account, which has all necessary details such as the time of maturity, fixed deposit interest rates, and the amount to be earned at the end.

2. Customer can renew FD as they find convenient, after the FD attains maturity.

3. One must note the recent FD rates, India for specific banks to understand the benefits to be received from fixed deposit account.

4. There are many tax saver fixed deposit schemes. TDS (tax deducted at source) on FD comes under the Income Tax Act 1961 of India.

5. The amount collated in fixed deposit is tax-free as indicated in the section 80C of the Income Tax Act 1961.

6. Premature withdrawal is not advisable. One can liquidate the FD before maturity but in such cases, no deductions shall be offered.

7. One can claim deduction on the principal amount, however interests are taxable. Tax deduction at source is charged at 10% on the interest earned in an annum.

8. The minimum deposit amount is Rs. 100. The deduction amount cannot be more than Rs. 1.5 lakhs.

9. Deductions can be enjoyed only by the primary FD account holder.

10. One can compound, reinvest or get a pay of the earned interest. While claiming deductions, do present the fixed deposit receipts.

Top Banks Fixed Deposit (FD) Schemes in India

Here is a list of some of the top banks that offer FD schemes in India:

  • State Bank Of India
  • HDFC Bank
  • ICICI Bank
  • Punjab National Bank
  • Axis Bank
  • Canara Bank
  • Bank of Baroda
  • Union Bank of India
  • IDBI Bank
  • Bank of India
  • Kotak Bank
  • UCO Bank
  • Central Bank of India
  • Indian Overseas Bank
  • Bank of Baroda
  • yes bank
  • Corporation Bank
  • Karur Vysya Bank
  • Bajaj Finserv
  • Andhra Bank
  • Federal Bank
  • Indian Bank
  • Allahabad Bank
  • The Ratnakar Bank
  • Standard Chartered Bank
  • Punjab & Sindh Bank
close
Top