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Fixed Deposit - Safest Investment

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 NameTenureInterest Rate(p.a.)
Axis Bank7 days - 10 years3.50% - 7.00%
Bank of Baroda7 days - 10 years4.50% - 6.70%
Bank of India7 days - 10 years5.25% - 6.35%
Canara Bank7 days - 10 years5.75% - 6.20%
Central Bank of India7 days - 10 years4.80% - 6.55%
HDFC Bank7 days - 10 years3.50% - 6.50%
ICICI Bank7 days - 10 years4.00% - 7.00%
IDBI Bank7 days - 10 years6.25% -
State Bank Of India7 days - 10 years5.75% - 6.85%
Yes Bank7 days - 10 years5.00% - 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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