Everyone wants to grow their money in a safe and steady manner. The more the wealth you amass the better is the future for you and your family. But given the constant market fluctuations, finding the right investment options is always a challenge. In this article we talk about fixed deposits and take a look at some of the FD interest rates offered by banks in India.
What is FD?
A fixed deposit is a type of investment instrument that helps you to grow a lump sum amount over a definite tenure at a predetermined rate of interest. All financial institutions like banks offer special interest rates for senior citizens, no-market-related risks and multiple interest payment options. The interest rate is not influenced by fluctuations on the market and the investor gets guaranteed returns upon maturity. The only defining criteria for FD is that money can be taken out prematurely but can only be done so upon paying a penalty.
Types of FD
There are a number of fixed deposits designed to suit the varying needs of investors in India. Some of these are:
● Standard Fixed Deposit
As the name suggests, this is a standard deposit meant for Hindu Undivided Families, Resident Indians, Partnership Firms, Sole Proprietorship Firms, Trust Accounts and Limited Companies. The tenure offered ranges from 7 days to 10 years. The interest rates offered on standard fixed deposits is typically higher than interest rates offered on regular savings accounts.
● Tax Saving Fixed Deposit
Tax saving fixed deposit also referred to as tax saver fixed deposit meant for Hindu Undivided Families and resident individuals. The FD scheme enables depositors to claim tax deduction of Rs. 1.5 lakhs under Section 80C.
● Flexi Fixed Deposits
These Deposits provide depositors with the benefit of saving or recurring accounts along with standard fixed deposits. This FD scheme provides depositors interest rates that are higher than rates on savings bank accounts thus, helping investors to earn more money.
● Floating Rate Fixed Deposits
In this type of scheme, the interest rate does not stay steady throughout the term but fluctuates with respect to reference rates such as the Treasury Bill Yield and RBI’S Repo Rate. As compared to other fixed deposits, the returns are dependent on the movement of the reference rate.
● Corporate Fixed Deposit
Corporate Fixed Deposits are offered by non-banking financial companies and by Housing Finance Companies (HFCs). The corporate FDs are not covered under insurance cover provided by Credit Guarantee Corporate (DICGC), the RBI subsidiary and by deposit insurance.
● Senior Citizen Fixed Deposit
This type of FD scheme is applicable to senior citizens aged 60 years and above. NBFCs and banks offer additional interest rates typically 50 bps over regular fixed deposit interest rates under this FD type.
Best FD Interest Rates in India 2023
Provided below is the all-bank list detailing the best FD interest rates in India 2023.
FD Scheme | All Bank FD Interest Rates 2023 |
PNB Tax Saving FD | 5.80- 6.30% |
IDBI Bank Tax Saving FD | 6.10-6.85% |
IDFC First Bank Tax Saving FD | 6.50% |
HDFC Bank Tax Saving FD | 6.10-6.60% |
Axis Bank Tax Saving FD | 6.10-6.85% |
SBI Bank Tax Saving FD | 6.10-6.60% |
IndusInd Bank Tax Saver Scheme | 6.75-7.50% |
Canara Bank Tax Saving FD | 6.50% |
RBL Bank Tax Saving FD | 6.55-7.05% |
Punjab and Sind Bank Tax Saving FD | 6.10-6.60% |
Union Bank of India Tax Saving FD | 6.70% |
Highest FD Interest Rates of Small Finance Banks
Below is a list of top 20 scheduled banks offering the very best of FD Interest Rates:
Banks | Highest FD Rate (% p.a.) | 1-year FD Rate (% p.a.) | 3-year FD Rate (% p.a.) | 5-year FD Rate (% p.a.) | Additional Interest Rate for Senior Citizens (% p.a.) |
Suryoday Small Finance Bank | 8.60 | 6.85 | 8.60 | 8.25 | 0.50 |
Fincare Small Finance Bank | 8.51 | 7.50 | 8.00 | 8.00 | 0.60 |
Equitas Small Finance Bank | 8.50 | 8.20 | 8.00 | 7.25 | 0.50 |
Jana Small Finance Bank | 8.50 | 8.00 | 8.50 | 7.25 | 0.50 |
ESAF Small Finance Bank | 8.50 | 6.00 | 6.75 | 6.25 | 0.50 |
Utkarsh Small Finance Bank | 8.25 | 7.75 | 7.50 | 7.50 | 0.60 |
Ujjivan Small Finance Bank | 8.25 | 8.25 | 7.20 | 7.20 | 0.50 |
SBM Bank | 8.15 | 6.25 | 8.15 | 7.75 | 0.50 |
Shivalik Small Finance Bank | 8.00 | 7.50 | 8.00 | 7.00 | 0.50 |
AU Small Finance Bank | 8.00 | 6.75 | 8.00 | 7.25 | 0.50 |
RBL Bank | 7.80 | 7.00 | 7.10 | 7.10 | 0.50 |
Unity Small Finance Bank | 9.00 | 7.35 | 7.65 | 8.25 | 0.50 |
DCB Bank | 7.75 | 7.25 | 7.75 | 7.50 | 0.50-0.75 |
YES Bank | 7.75 | 7.50 | 7.25 | 7.00 | 0.50-0.75 |
IndusInd Bank | 7.50 | 7.50 | 7.25 | 7.25 | 0.50-0.75 |
South Indian Bank | 7.40 | 6.60 | 6.50 | 6.00 | 0.50 |
IDFC First Bank | 7.50 | 6.50 | 7.25 | 7.00 | 0.50 |
Axis Bank | 7.20 | 6.75 | 7.00 | 7.00 | 0.50-0.75 |
Punjab & Sind Bank | 7.35 | 6.40 | 6.25 | 6.25 | 0.50 |
Best NBFCs FD Interest Rates
The FD interest rates offered by NBFCs are usually higher than those given by commercial banks. Below is a list of NBFC organisations that give beneficial interest rates for amounts less than and greater than 2 crores for tenures that range from 1 to 5 years starting April 2023.
NBFC Organisation | 1-Year FD Interest Rates | 3-Year FD Interest Rates | 5-Year FD Interest Rates | Tenure Range |
ICICI Home Finance | 7.00% | 7.40% | 7.50% | 12 to 120 months |
HDFC Ltd. | 7.10% | 7.40% | 7.40% | 12 to 120 months |
LIC Housing Ltd. | 7.25% | 7.75% | 7.75% | 12 to 60 months |
Mahindra Finance | 7.40% | 7.70% | 7.75% | 12 to 60 months |
Manipal Housing Finance Syndicate Ltd. | 7.75% | 7.75% | 7.25% | 12 to 60 months |
PNB Housing Finance Ltd. | 7.35% | 7.70% | 7.50% | 12 to 120 months |
Shriram Finance Ltd. | 7.34% | 7.95% | 8.18% | 12 to 60 months |
Sundaram Finance Ltd. | 7.45% | 7.75% | 12 to 36 months | |
Muthoot Capital Services Limited | 6.25% | 6.75% | 7.25% | 12 to 60 months |
Bajaj Finance Ltd. | 7.40% | 7.65% | 7.65% | 12 to 60 months |
Best 5 Year FD Interest Rates
Below is table listing the top 5-Year best FD interest rates of some popular Banks in India
Bank Name | General Citizens (p.a.) | Senior Citizens (p.a.) |
HDFC Bank | 7.00% | 7.50% |
ICICI Bank | 6.90% | 7.50% |
Deutsche Bank | 7.25% | 7.25% |
RBL Bank | 7.10% | 7.60% |
DBS Bank | 6.50% | 7.00% |
IndusInd Bank | 7.25% | 7.75% |
Punjab National Bank | 6.50% | 7.00% |
State Bank of India | 6.50% | 7.50% |
Kotak Mahindra | 6.20% | 6.70% |
Bank of Baroda | 6.50% | 7.50% |
UCO Bank | 6.10% | 6.60% |
HSBC Bank | 6.00% | 6.50% |
Bandhan Bank | 5.85% | 6.60% |
Advantages of Availing Fixed Deposit
Fixed Deposit rates are some of the safest investment options offered by banks. Other advantages of this instrument option are
- There are always fixed returns with FD interest rates
- During the maturity period, the investor gets initial investment along with collected interest
- There are flexible payment options
- Senior citizens earn more money from life savings
Conclusion
Overall, a fixed deposit is always a good investment option whether you are a beginner or a mature investor. They always offer assured returns on the FD interest rates and there is scope for flexibility. However, it is important to be fully aware of the risks that are involved with the investment.