The changes in India’s financial arena have been dynamic; one among these is that every investor or saver must know that the FD interest rates are also fluctuating.
These rates are also significant in determining the decisions that both individuals and firms make with their investments. However, as economic factors like inflation rates and fiscal policies change, so do interest offered by banks across the county. Many investors, individuals, or senior citizens are opting for fixed deposits because of their unique features.
Besides that, various banks are offering the highest FD interest rates. So, if you are someone willing to invest in FDs, then in this post, we will highlight the current interest rates some of the popular banks offer.
What Is A Fixed Deposit?
An FD is a financial instrument where one deposits an amount to a bank or financial institution, and the money accumulates interest over time. This option offers capital safety and guaranteed profit at maturity. The amount deposited is locked during the agreed period, which can vary from a few months to years.
Fixed Deposits are low-risk investments that might suit an investor who needs steady returns. The interest rates are determined at the time of holding, providing a safe platform for people to increase their holdings over a definite period.
For opening a regular FD, the minimum deposit required would be Rs 1,000. Still, note that such an amount may differ depending on the bank you select. If you are looking for a tax-reducing FD with a duration of five years, then your benefit is that you can open this account with just Rs.100.
FD Interest Rates Of Various Banks
| Bank | General Public Interest Rates p.a. | Senior Citizen Interest Rates p.a. |
| Axis Bank | 3.00% to 7.10% | 3.50% to 7.75% |
| Bank of Baroda | 4.25% to 7.25% | 4.75% to 7.65% |
| Bandhan Bank | 3.00% to 7.85% | 3.75% to 8.35% |
| Central Bank of India | 3.50% to 6.75% | 4.00% to 7.25% |
| Canara Bank | 4.00% to 7.25% | 4.00% to 7.75% |
| HDFC Bank | 3.00% to 7.20% | 3.50% to 7.75% |
| ICICI Bank | 3.00% to 7.10% | 3.50% to 7.65% |
| IDBI Bank | 3.00% to 7.00% | 3.50% to 7.50% |
| IDFC FIRST Bank | 3.00% to 7.75% | 3.50% to 8.25% |
| IndusInd Bank | 3.50% to 7.50% | 4.25% to 8.25% |
| Karnataka Bank | 3.50% to 7.25% | 3.90% to 7.65% |
| Kotak Mahindra Bank | 2.75% to 7.25% | 3.25% to 7.80% |
| Punjab National Bank | 3.50% to 7.25% | 4.00% to 7.75% |
| RBL Bank | 3.50% to 8.00% | 4.00% to 8.50% |
What Are The Benefits Of Fixed Deposits?
Various benefits accompany FDs, which is why they are among the best investments for many people.
1. Stability and Safety:
Stability and safety are the essential characteristics of fixed deposits. They are regarded as one of the most stable investment choices because they enjoy the backing of banks or financial institutions. The original amount invested is usually guaranteed, and the risk of loss is much lower than with other investment vehicles that are more unstable.
2. Guaranteed Returns:
Guaranteed returns provide a significant advantage to Fixed Deposits. The FD interest rates at the time of deposit so that investors are immediately aware of what returns they will receive upon maturation.
3. Flexible Tenures:
Fixed Deposits have different tenures, which may be a few months to several years. This flexibility allows investors to pick a tenure that matches their objectives and liquidity requirements.
The advantage of short-term FDs is that they provide the facility for easy disbursement, while long–term FDs are rewarding in terms of rate percentage.
4. Diverse Interest Payment Options:
With FDs, investors can select what form they wish to receive their interest payments. Some of these are monthly, quarterly, half-yearly or yearly payments. Flexibility allows people to adjust cash flow depending on their financial needs.
5. Ease of Operation:
The procedure for opening a Fixed Deposit is relatively simple. Most banks and financial companies allow investors to open an FD both online and through their branches, with minimal documentation.
The ease of this process ensures that FDs are affordable and available to many investors, including newcomers to the world of financial investments.
6. Liquidity Options:
Although Fixed Deposits are meant to be held until maturation to achieve the highest returns possible, such instruments provide some liquidity facilities.
However, investors can terminate their FDs prematurely but with a penalty attached despite the FD Interest rates. In addition, banks offer overdraft facilities against FDs, allowing customers to access quick cash without violating deposit laws.
7. Senior Citizen Benefits:
The FD interest rates many banks offer are higher for senior citizens to deposit fixed. Hence, this is an extra advantage intended to ensure the financial protection of the older person.
Retirees seeking a steady cash stream can find this additional interest quite substantial.
8. Portfolio Diversification:
Fixed Deposits help with a diversified investment portfolio. Despite potentially greater yields, FDs have stability and predictability that help reduce risk by offering a balance in wealth management.
9. Tax Deduction under Section 80C:
Nowadays, the majority of banks and NBFCs offer a 5-year Tax Saving FD Scheme with a lock-in period of 5 years. Tax deductions u/s 80C of the Income Tax Act can be claimed for up to Rs 1.5 lakh per financial year in principal. Yet, the interest aspect is taxable according to the slab of the depositor.
Who Are Eligible For Fixed Deposits In India?
- Residents
- Minors
- Hindu undivided families
- NRI
- Senior citizens
- Companies
- Societies or clubs
- Sole proprietorship
- Individuals or joint investors
- Partnership firms
- Trust accounts
How To Open Fixed Deposit?
After you are aware of the Fixed deposit interest rates, the next thing is to proceed with the FD opening. You can follow the steps below:
Opening a Fixed Deposit Online
- To open a fixed deposit, go to the bank’s official website.
- If you have an existing bank account, please log in. Otherwise, create a new account.
- Go to the ‘Fixed Deposit’ option.
- Fill in all the mandatory details, including amount, tenure, nominee and digital signatures.
- Upload all the necessary documents.
- Confirm all the details and submit.
- Pay the money online and save the FD deposit receipt.
Opening a Fixed Deposit Offline
To open an FD account offline, follow the steps mentioned below:
- Go to the bank and ask for the fixed deposit opening form.
- Fill out the application for the fixed deposit with all the necessary details regarding the amount and tenure.
- Send the requested documents and filled application form to the bank.
- Pay the amount invested in the fixed deposit account as cash or cheque.
- The bank will process your application to open the FD account.
Conclusion
So these are some of the prevailing FD Interest rates by some well-known Indian banks. One of the safest investments involves investing in fixed deposits. The interest that banks pay on FDs makes it a good choice. While choosing a fixed deposit scheme, consider investment goal, liquidity, investment tenure, current FD rates, and interest payout options. Fixed Deposits become more fruitful with platforms such as Wint Wealth, which presents appealing interest rates.