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Fixed Deposit or FD is the safest and secure investment available in India. The term fixed in the FD means the interest rate is fixed all along the period of time ranging from 7 days to a maximum of 10 years. Every bank offers different interest rates according to tenure and payout. The Interest rate changes from time to time according to various factors Like a change in the rules of Reserve Bank of India, Inflation, Recession.
The fixed deposit will be offering higher returns than the regular savings account interest but the amount deposit in FD will only be used after maturity whereas the amount in saving account can be used anytime. Currently, most banks offer a 3 to 4 % interest rate whereas the Fixed Deposit offers 6 to 9 % rates which are generally good for saving the money.
As you know currently saving is the most important way for financial freedom, so the Fixed Deposit is the way by which we can easily set up Monthly Income or Cumulative saving lifetime. There is an additional 0.5 % interest more for Senior Citizens. The FD is also insured by Deposit Insurance and Credit Guarantee Corporation ( DICGC ) up to Rs 1,00,000.
Fixed Deposit Interest Rate In India
| Bank Name | Tenure | Interest Rate(p.a.) |
| Axis Bank | 7 days - 10 years | 3.50% - 7.00% |
| Bank of Baroda | 7 days - 10 years | 4.50% - 6.70% |
| Bank of India | 7 days - 10 years | 5.25% - 6.35% |
| Canara Bank | 7 days - 10 years | 5.75% - 6.20% |
| Central Bank of India | 7 days - 10 years | 4.80% - 6.55% |
| HDFC Bank | 7 days - 10 years | 3.50% - 6.50% |
| ICICI Bank | 7 days - 10 years | 4.00% - 7.00% |
| IDBI Bank | 7 days - 10 years | 6.25% - |
| State Bank Of India | 7 days - 10 years | 5.75% - 6.85% |
| Yes Bank | 7 days - 10 years | 5.00% - 7.25% |
2020 Best Fixed Deposit Rates
Other Institute Offering Higher Interest Rate
Ujjivan small Finance Bank is offering 8% interest rates for 1 year which is highest rates currently.
Note - This interest rate of Cumulative scheme only
A fixed deposit can be open online and offline at the branch. There are various ways of Payout in Fixed Deposit
1- Monthly
2 - Quarterly
3 - Half - Yearly
4 - Annual
As per Requirements, the FD can be set according to needs. There will be some difference in each of the above payouts due to the change of interest rates, ie Compounding Interest.
Cumulative Fixed Deposit - Interest Payout at the time of maturity
Non-Cumulative Fixed Deposit - Interest Payout at monthly, quarterly, half-yearly, or annual types.
Taxes On Fixed Deposit
There will be taxes applicable in Fixed Deposit interest earned . 10 % TDS will be detected if the interest earn is greater than Rs 40,000 per Financial Year. The interest is also considered while filing IT - Return under Income from other sources
There is also a benefit of tax saving on FD, as per Section 80C of the income tax act the fixed deposit account holders can claim a tax deduction up to RS 1,50,000.
TDS know as tax deducted at source will be applicable for which the interest earn is more than Rs 40,000. The Bank will deduct TDS (10%) applicable and transfer the remaining amount to the payee. Bank will deduct TDS at the end of the Financial Year.
Benefits of Fixed Deposit Investment
- Fixed Return
- Secure Deposit
- Better returns than Saving
- Various Interest Payout
- Various Tenure
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