Fixed Deposits have always been popular in India as they are one of the safest and most reliable means of investment. Fixed Deposits give you good returns on your money as the interest rate offered is much higher compared to a Savings Account or Recurring Deposit.
A higher rate of interest combined with tax benefits and good returns is what makes Fixed Deposits a popular investment option for most of us. Let’s get to know a little more about Fixed Deposits, shall we?
Additional Reading: NRI Fixed Deposit
Features of Fixed Deposits
Fixed Deposits have certain unique features which make them a lucrative investment option:
- You can only deposit money once in your Fixed Deposit account
- For multiple deposits you need to open separate accounts
- Income Tax is deducted at source on the interest rate accumulated
- The interest on your Fixed Deposit is credited to your Savings Account on a monthly, quarterly or annual basis
- You need to produce the Fixed Deposit receipt at the time of maturity
- You also have the option of renewing your Fixed Deposit for a longer period
Fixed Deposits in a bank can typically range from a period of seven days to ten years and the interest rate is calculated depending on the tenure.
Additional Reading: Personal Loan against Fixed Deposit
Fixed Deposit interest rates
A Fixed Deposit can usually earn up to 9% per annum interest rate, but the rates may vary depending on the banks.
The interest on Fixed Deposits is calculated by adding the compound interest earned on the Fixed Deposit amount to the principal amount. So, the compound interest earned on your Fixed Deposit also ends up earning additional interest. That’s how the interest rates on Fixed Deposits are much higher when compared to other investment options. Makes sense!
Fixed Deposit interest rates for private sector banks
Here’s a comprehensive list of the ten top-tier private sector banks and their Fixed Deposit interest rates:
| Name of Bank | Period | Interest Rate & Compounding |
| Ratnakar Bank Ltd. | 1 year | 8.5% (Quarterly Compounding) |
| Bandhan Bank | 1 year | 8.5% (Quarterly Compounding) |
| IndusInd Bank | 1 year | 8.0% (Quarterly Compounding) |
| Jammu & Kashmir Bank | 1 year | 8.0% (Quarterly Compounding) |
| Kotak Mahindra Bank | 1 year | 7.9% (Monthly Compounding) |
| Laxmi Vilas Bank | 1 year | 7.9% (Monthly Compounding) |
| HDFC Bank | 1 year | 7.9% (Quarterly Compounding) |
| Axis Bank | 1 year | 7.9% (Quarterly Compounding) |
| Karnataka Bank | 1 year | 7.75% (Monthly Compounding) |
| ICICI Bank | 1 year | 7.75% (Quarterly Compounding) |
Fixed Deposit interest rates for public sector banks
Here’s an all-inclusive list of the ten top-tier public sector banks and their Fixed Deposit interest rates:
| Name of Bank | Period | Interest Rate & Compounding |
| IDBI Bank | 1 year | 7.75% (Quarterly Compounding) |
| Vijaya Bank | 1 year | 7.75% (Quarterly Compounding) |
| Punjab National Bank | 1 year | 7.0% (Quarterly Compounding) |
| Allahabad Bank | 1 year | 7.75% (Quarterly Compounding) |
| Andhra Bank | 1 year | 7.75% (Quarterly Compounding) |
| Bank of Baroda | 1 year | 7.75% (Quarterly Compounding) |
| Central Bank of India | 1 year | 7.75% (Quarterly Compounding) |
| UCO Bank | 1 year | 7.75% (Quarterly Compounding) |
| Union Bank of India | 1 year | 7.65 % (Half Yearly Compounding) |
| State Bank Of India | 1 year | 7.25% (Quarterly Compounding) |
Note: Fixed Deposit interest rates are as of the time of the writing of this article
Information about interest rates offered on Fixed Deposit accounts by some of the top-tier banks will make it easier for you to choose the right bank when opening a Fixed Deposit account. So, let’s start saving now!
Compare FD Rates & Open a Fixed Deposit
Additional Reading: Post Office Fixed Deposit Rates