Individuals who are planning to invest in bank fixed deposits can rejoice, as numerous banks have recently increased their interest rates on their FDs. Is now the right time for you to consider investing in fixed deposits?
A fixed deposit (FD) is an excellent choice for those who prefer a low-risk investment. FD ensures a consistent interest rate on the principal sum throughout the entire term of the deposit, leading to accumulation over time. One of the notable advantages of FDs is their flexible tenure, allowing investors to manage multiple deposits with varying durations.
You have the option to open an FD account either with your current bank or with another institution that offers more attractive interest rates. The choice is entirely yours; however, be aware that the process may differ, particularly regarding KYC and documentation requirements if you choose a bank with which you have no prior relationship.
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Fixed deposits ensure the security of your principal amount while providing a steady income stream. If you possess a lump sum that you do not intend to utilize for a while, placing it in an FD account could be a prudent decision. The returns on FDs remain stable, as they are not influenced by market fluctuations, offering a consistent interest rate for the agreed-upon term.
Establishing a fixed deposit account has become a simple procedure. You have the option to either use online banking facilities or go to the closest branch of your bank. If you choose to open an FD account with the same bank where you maintain a savings account, you can bypass the KYC process and easily transfer funds.
Additionally, banks provide senior citizens with an extra 50 basis points on fixed deposit interest rates. Consequently, if your household includes senior citizens, it may be advantageous to establish fixed deposits in their names to take advantage of the elevated interest rates.
Fixed deposits can also serve as a reliable source for immediate financial needs or emergencies, as the funds can be accessed quickly. Furthermore, it is possible to secure a loan against your FD; however, it is advisable to thoroughly review the terms and conditions before proceeding.
You have the option to select the fixed deposit amount to be transferred to your savings account, or you may choose to renew it upon maturity. Should you opt for the latter, the funds will be reinvested as a fixed deposit. It is important to note that if you withdraw your FD prior to its maturity date, you will receive a reduced interest rate, and a penalty will be applied to your FD amount. It is advisable to weigh the advantages and disadvantages and to compare the interest rates offered by various banks for fixed deposits before making a final decision.
Below is a list of India’s more than 40 banks – including Axis Bank, Kotak Bank, Yes Bank, SBI, HDFC Bank, ICICI Bank, PNB, and Bank on India, among others — that provide competitive interest rates on fixed deposits. You can assess the interest rates and terms ranging from 1 to 5 years and select according to your preferences.
Top Banks with Highest FD Rates
| Bank Fixed Deposit Rates | |||||
| Bank Name | Interest Rates (p.a.) | ||||
| Highest slab | 1-year tenure (%) | 3-year tenure (%) | 5-year tenure (%) | ||
| % | Tenure | ||||
| SMALL FINANCE BANKS | |||||
| AU Small Finance Bank | 8.00 | 18 months | 7.25 | 7.50 | 7.25 |
| Equitas Small Finance Bank | 8.50 | 444 days | 8.20 | 8.00 | 7.25 |
| ESAF Small Finance Bank | 8.25 | 2 years to less than 3 years | 6.00 | 6.75 | 6.25 |
| Jana Small Finance Bank | 8.25 | 365 days to 1095 days | 8.25 | 8.25 | 7.25 |
| NorthEast Small Finance Bank | 9.00 | 546 days to 1111 days | 7.00 | 9.00 | 6.25 |
| Suryoday Small Finance Bank | 8.65 | 2 years 2 days | 6.85 | 8.60 | 8.25 |
| Ujjivan Small Finance Bank | 8.25 | 12 months | 8.25 | 7.20 | 7.20 |
| Unity Small Finance Bank | 9.00 | 1001 days | 7.85 | 8.15 | 8.15 |
| Utkarsh Small Finance Bank | 8.50 | 2 years to 3 years; 1500 days | 8.00 | 8.50 | 7.75 |
| PRIVATE SECTOR BANKS | |||||
| Axis Bank | 7.25 | 15 months to less than 2 years | 6.70 | 7.10 | 7.00 |
| Bandhan Bank | 8.00 | 1 year 9 months | 7.25 | 7.25 | 5.85 |
| City Union Bank | 7.50 | 333 days | 7.00 | 6.50 | 6.25 |
| CSB Bank | 7.75 | 401 days | 5.00 | 5.75 | 5.75 |
| DBS Bank | 7.50 | 376 days to 540 days | 7.00 | 6.50 | 6.50 |
| DCB Bank | 8.05 | 19 months to 20 months | 7.10 | 7.55 | 7.40 |
| Federal Bank | 7.40 | 50 months ; 777 days | 6.80 | 7.00 | 6.60 |
| HDFC Bank | 7.40 | 4 Year 7 Months (55 months) | 6.60 | 7.00 | 7.00 |
| ICICI Bank | 7.25 | 15 months to 2 years | 6.70 | 7.00 | 7.00 |
| IDFC First Bank | 7.75 | 500 days | 6.50 | 7.25 | 7.00 |
| IndusInd Bank | 7.99 | 1 year 4 months to less than 1 year 6 months | 7.75 | 7.25 | 7.25 |
| Jammu & Kashmir Bank | 7.00 | 1 year to less than 3 years | 7.00 | 6.75 | 6.50 |
| Karur Vysya Bank | 7.60 | 760 days – Special Deposit | 7.00 | 7.00 | 7.00 |
| Karnataka Bank | 7.25 | 375 days | 7.10 | 6.50 | 6.50 |
| Kotak Mahindra Bank | 7.40 | 390 days to less than 23 months | 7.10 | 7.00 | 6.20 |
| RBL Bank | 8.10 | 500 days | 7.50 | 7.50 | 7.10 |
| SBM Bank India | 8.25 | Above 18 months to less than 2 years 3 days | 7.05 | 7.30 | 7.75 |
| South Indian Bank | 7.25 | 400 Days | 6.70 | 6.70 | 6.00 |
| Tamilnad Mercantile Bank | 7.50 | 400 days | 7.00 | 6.50 | 6.50 |
| YES Bank | 8.00 | 18 months | 7.25 | 7.25 | 7.25 |
| PUBLIC SECTOR BANKS | |||||
| Bank of Baroda | 7.30 | 399 days – bob Monsoon Dhamaka | 6.85 | 7.15 | 6.50 |
| Bank of India | 7.25 | 333 days – Star Dhan Vriddhi | 6.8 | 6.50 | 6.00 |
| Bank of Maharashtra | 7.25 | 777 days | 6.75 | 6.50 | 6.50 |
| Canara Bank | 7.25 | 444 days | 6.85 | 6.80 | 6.70 |
| Central Bank of India | 7.45 | 444 days | 6.85 | 6.75 | 6.50 |
| Indian Bank | 7.25 | 400 days – IND SUPER | 6.10 | 6.25 | 6.25 |
| Indian Overseas Bank | 7.30 | 444 days | 7.10 | 6.50 | 6.50 |
| Punjab National Bank | 7.25 | 400 days | 6.80 | 7.00 | 6.50 |
| Punjab & Sind Bank | 7.30 | 666 days | 6.30 | 6.00 | 6.00 |
| State Bank of India | 7.25 | 444 days – Amrit Vrishti | 6.80 | 6.75 | 6.50 |
| Union Bank of India | 7.40 | 333 days | 6.80 | 6.70 | 6.50 |
| FOREIGN BANKS | |||||
| Deutsche Bank | 8.00 | Above 1 year to 3 years | 7.00 | 8.00 | 7.50 |
| HSBC Bank | 7.50 | 601 to 699 days | 4.00 | 7.00 | 6.00 |
| Standard Chartered Bank | 7.50 | 1 year to 375 days; 2 years to less than 3 years | 7.50 | 7.10 | 6.75 |
| Source: Paisabazaar.com | |||||
| Interest rates as of 11 September 2024 | |||||