Fixed deposit is one of the most preferred investment avenues among Indian investors, especially among the risk-averse ones. There are multiple reasons for the same – returns free from market risks, fixed rate of interest, income tax benefits for tax-saving FDs, various interest payout options, and a higher rate of interest for senior citizens.
Fixed deposits also come with a higher rate of interest than other similar investment options. You can now earn interest of over 8% on fixed deposits offered by certain banks and financial institutions. Read on to know some of the best FD rates in India in 2023.
Why Should You Opt for a Suitable FD Interest Rate?
There are various reasons to opt for an FD that offers a suitable FD interest rate. Some of them have been discussed below:
- You can plan your long-term future goals based on receiving lucrative interest from your FD investments.
- You can plan your finances accordingly, knowing you will have a substantial amount in the future.
- If you also invest in other instruments that involve market risk for higher returns, such as stocks and mutual funds, investing a portion of your fund in a dependable, risk-free return-generating avenue can reduce your overall portfolio risk.
- You can take advantage of the power of compounding and earn a higher interest and sum at maturity.
- Senior citizens can benefit from higher rates of interest and ease their retirement financial planning.
The best FD rates in India are the ones that offer slightly or significantly higher fixed deposit rates of interest for general as well as senior citizens. There are banks and non-banking financial institutions (NBFCs) from both public and private sectors that offer some of the best FD interest rates in India.
Previously, fixed deposit accounts used to offer average interest rates to the general citizens and NRIs when compared to other investment options. However, today, financial institutions have modified their offerings; now, most fixed deposits come with competitive interest rates.
This is why FDs have become a suitable choice for risk-averse investors as well as investors who want to diversify their portfolios and invest in less risky but profitable ventures.
The type of fixed deposit and interest rate determines your returns on FD maturity. Hence, choosing the best rate of interest will benefit you in the long run.
Which Bank is Giving Best FD Rates in India?
The table below highlights the best FD rates of interest in 2023 offered by some of the leading banks and financial institutions in India.
|Bank||Interest Rates (General Citizen)||Interest Rates (Senior Citizen)||Effective From|
|State Bank of India||3% to 7.10%||3.5% to 7.75%||February 15 2023|
|HDFC Bank||3% to 7.25%||3.5% to 7.75%||May 29 2023|
|Bank of Baroda||3% to 7.25%||3.5% to 7.75%||May 12 2023|
|Canara Bank||4% to 7.25%||4% to 7.75%||August 8 2023|
|ICICI Bank||3% to 7.10%||3.50% to 7.50%||February 24 2023|
|Kotak Mahindra Bank||2.75% to 7.25%||3.25% to 7.75%||September 13 2023|
|IndusInd Bank||3.50% to 7.50%||4.25% to 8.25%||August 5 2023|
|Axis Bank||3% to 7.10%||3.50% to 7.60%||September 18 2023|
|Federal Bank||3% to 7.30%||3.50% to 7.80%||September 1 2023|
|Punjab National Bank||3.5% to 7.25%||4% to 7.75%||July 1 2023|
Note: FD rates applicable to deposit amounts of less than ₹2 crores.
Best FD Rates for NRI in India
A very popular question regarding fixed deposits is – can NRIs invest in FDs in India? Yes, they can!
Most banks and NBFCs offer Non-Residential Indians the option to open three types of FD accounts:
- Non-Resident External (NRE) Fixed Deposit – For NRIs to deposit an amount in foreign currency, which then gets converted to Indian currency. No tax implications.
- Non-Resident Ordinary (NRO) Fixed Deposit – For NRIs to deposit their earnings in India in an Indian FD account. There are tax implications on the principal interest earned.
- Foreign-Currency Non-Resident Account (FCNR) Fixed Deposit – For NRIs wanting to invest their foreign earnings in an FD account in India. The maturity payout is fully repatriable.
The following table discusses the best FD rates for NRI in India, offered by some of the top financial institutions for deposit amounts up to ₹2 crores.
|Bank||1 Year||1 to 3 Years||3 to 5 Years||5 to 10 Years|
|Union Bank of India||6.30%||6.30% – 7.00%||6.50% – 6.70%||6.70%|
|Axis Bank||6.80%||6.80% – 7.10%||7.00%||7.00%|
|Punjab National Bank||6.75%||6.80% – 7.25%||6.50%||6.50%|
|IDBI bank||6.80%||6.80% – 6.50%||6.50%||6.25%|
|Indian Overseas Bank||6.50%||6.50% – 7.25%||6.80%||6.50%|
|Canara Bank||6.90%||7.25% – 6.90%||6.80%||6.70%|
|Central Bank of India||6.75%||6.75% – 6.50%||6.25%||6.25%|
|UCO Bank||6.50%||6.50% – 6.30%||6.20%||6.10%|
|Bank of India||6.00%||6.00% – 7.25%||6.50%||6%|
|Bank of Baroda||6.75%||6.75%-7.05%||6.50%||6.50%|
|State Bank of India||6.80%||7.00% – 7.10%||6.50%||6.50%|
|Indian Bank||6.10%||6.30% – 6.70%||6.25%||6.10%|
|Bank of Maharashtra||6.35%||6.00% – 6.75%||5.75%||5.75%|
|Karur Vysya Bank||7.00%||7.00% – 7.20%||6.25%||6.25%|
|Yes Bank||7.50%||7.50% – 7.75%||7.00%||7.00%|
|DCB Bank||7.25%||7.25% – 8.00%||7.75%||7.75%|
|South Indian Bank||6.60%||6.50% – 7.40%||6.50% – 6.00%||6.50% – 6.00%|
|City Union Bank||6.75%||6.50% – 7.00%||6.25%||6.25%|
|Federal Bank||6.80%||6.75% – 7.30%||6.60%||6.60%|
|IndusInd Bank||7.75%||7.50% – 7.75%||7.75% – 7.25%||7.00%|
Availing fixed deposit accounts with the best FD rates in India can help Indian residents and NRIs get substantial returns on maturity of their FDs. However, you should know that interests earned on FDs are fully taxable under Income from Other Sources. However, if your interest income earned in a financial year is less than ₹40,000 per year, you will have to submit Form 15G or 15H (senior citizen) to instruct the bank not to deduct any TDS.
Best FD Rates in India FAQs :-
You can claim tax deductions of up to ₹1.5 lakh on the FD amount under Section 80C of the Income Tax Act. However, this is applicable to only tax-saving FDs, which come with a lock-in period.
No, you cannot make an early withdrawal from tax-saver FD as it comes with a lock-in period of 5 years.
The maximum amount in most banks and NBFCs has no upper limit. However, the minimum amount differs, and it usually ranges between ₹1000 and ₹25,000.