Fixed Deposit (FD) Interest Rates

A fixed deposit (FD) is a deposit account offered by banks for a fixed period at a fixed interest rate. You can keep a fixed sum in this account. The money has to be deposited in lump-sum during the opening of the account. At the end of tenure, the earned interest is calculated on the principal amount, and the same is credited to your bank account.

Fixed accounts earn a higher interest than the regular savings bank accounts. Fixed deposit interest rates are prompted by the RBI’s monetary policy such as that for base rate, repo rate, economic conditions, level of credit demand, and internal liquidity positions of banks.

  • FDs are known as either ‘time deposits’ or ‘term deposits’. A term deposit is said to be the safest investment option as against other savings instruments.
  • Duration of FDs is between 1 day and 10 years.
  • FD interest rates vary in different banks depending on the deposit amount, bank interest rate policies, tenure, and the type of depositor.
  • If you wish to add more money to an FD, you have to open another fixed deposit account.

FD Deposit Rates in India

Fixed deposit rates in all bank is as follows.

Banks FD Rates Tenure
SBI 5.75% - 6.85% 7 days to 10 years
HDFC Bank 3.50% - 7.40% 7 days to 10 years
ICICI Bank 4.00% - 7.50% 7 days to 10 years
Axis Bank 3.50% - 7.55% 7 days to 10 years
IDFC Bank 4.00% - 8.25% 7 days to 10 years
PNB 5.75% - 6.75% 7 days to 10 years

Best FD Interest Rates in India

  • After a thorough comparison of fixed deposit rates across all banks, it has been found that IDFC bank offers the highest rate, 8.25% on deposits with tenure of at least 3 years 1 day to up to 10 years.
  • RBL bank offers the highest FD rate of 8% for deposit of 1 year tenure.
  • DBS bank offers the best interest rate of 7.50% for an FD of 5 years tenure.
  • In NBFCs and HFCs, DHFL offers FD interest rates up to 9% on FDs for deposits on tenure of 36 months, which is the best in the market.
  • The risk of FDs in HFCs and NBFCs depend on the credit ratings associated with the particular deposit schemes.

FD Interest Rates Calculator

FD interest rates of all banks are calculated on interest rates and the compounding frequencies.

The formula used for calculating all banks interest rates for fixed deposits is mentioned below:
A = P * (1+ r/n) ^ n*t
I = A – P 
A = Maturity value
P = Principal amount
r = Interest rate
t = Number of years
n = Compounded interest frequency
I = Earned interest amount

FD Maturity and Interest Rates Calculator

All Bank FD Interest Rates

Fixed deposits in banks are a risk-free investment option with a rate up to 9%. They offer moderate returns, which can cover the inflation rate. As FDs carry market and credit risk, you must be careful before choosing a deposit scheme of non-banking firms. Bank fixed deposits being risk-free; do not need a credit rating to offer a slightly lower rate than FDs from non-banks.

What Affects the Interest Rates of Bank Fixed Deposits?

All bank FD rates are influenced by deposit amount, tenure, and depositor type.

  • Deposit Amount: A lower rate of interest will be applicable on bulk deposits of more than Rs. 1 cr. But, higher rates of interest are applicable on deposits of less than Rs. 1 cr.
  • Tenure: Lower rates are applicable on deposits with a shorter tenure. The highest FD rate on fixed deposits up to 10 years is 8.25%.
  • Type of Depositor: Senior citizens (of 60 years of age and above) are entitled to higher fixed deposit interest rates. The range of interest for senior citizens is between 3.40% and 9.40%, depending on the amount of deposit and the tenure. They usually earn 0.25% to 0.75% higher interest as against regular deposit rates.

Features of Fixed Deposits in Banks

Below given are some of the features of FD schemes in India.

  • Some banks offer a sweep-in facility for term deposits that allow you to interlink your savings bank account to the FD deposit account. This facility allows a transfer of surplus funds from your savings account to the fixed deposit account, so that you earn the rate on the savings. You also get the option to break the Fixed deposit anytime to use the amount for emergency expenses.
  • A fixed deposit account in banks can be opened by all Indian residents including HUFs and minors.
  • You can choose 2 nominees who will be eligible to receive the earned interest and principal amount on your death, by submitting a legit death proof.
  • Premature withdrawals will cost a penalty.
  • You can avail a loan against your FD account. The loan amount can be between 75% and 95% of the fixed deposit amount, and shall vary from a lender to another. The interest rate on loans against fixed deposits is 1% to 1.5% higher than the rate earned on the FD.

Applicable Tax on Fixed Deposit Schemes

TDS will be applicable on all bank interest rates on FDs. Basically the tax is applicable on the earned interest of the principal amount. TDS is calculated in the end of every financial year.

  • If the interest earned is less than Rs. 40,000 for a financial year, then no taxes are applicable. Before the Interim Budget of 2019, tax was applicable on interest income of more than Rs. 10,000.
  • 10% tax is applied on income earning on fixed deposits, of more than Rs. 40,000 in a FY.
  • 20% TDS is applied if you do not submit PAN card to the bank.
  • If your income is not in the taxable income bracket, which is Rs. 2.50 lakhs for individuals and Rs. 3 lakhs for senior citizens, then no tax will be applicable on the FDs.
  • If you do not fall under the taxable income bracket, then you have to submit Form 15G and Form 15H to your bank.
  • Senior citizens are exempted of taxes on interest income of up to Rs. 50,000 against recurring deposit, savings account, and fixed deposit account, for a financial year.

Disclaimer: All information stated is purely for informational purpose. The fixed deposit schemes and rates may change with a change in RBI policies and the bank’s policies.