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Best FD Interest Rates

IndianMoney.com Research Team | Posted On Thursday, March 07,2019, 02:28 PM

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Best FD Interest Rates

 

 

What is a Fixed Deposit?

Fixed deposit FD, is a financial instrument offered by banks and non banking financial companies NBFCs, in which you deposit a sum of money over a certain period of time to earn interest. The rate of interest earned on a fixed deposit is much higher than that of a savings bank account. Investing in a fixed deposit is considered the safest investment option and is a traditional mode of investing money to earn good returns.

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Best FD Interest Rates

Who Should Invest in FD?

All India citizens are eligible to invest in a fixed deposit. Even minors can invest in FD with a guardian/parent. To invest in FD, you must possess a PAN or fill Form 60. You should invest in FD if you have a lump sum at your disposal and want to earn an annual rate of interest which is much higher than that of a savings bank account.

There are other investment options, but those options are not risk free like fixed deposit. If you are not ready to bear risk with your investment, then fixed deposit is the most suitable investment option.

SEE ALSO:  Fixed Deposit

FD Interest Rates

Banks and NBFCs offer a higher rate of interest on FD when compared to a normal savings bank account. Banks and NBFCs offer an interest of 3 to 9 % on FD. Senior citizens are offered a higher rate of interest. The table below shows the interest rate offered by popular banks and NBFCs on FD:

Bank

FD Rate of Interest

Senior Citizen FD Rates

SBI Fixed Deposit

5.75% - 6.85%

6.25% - 7.35%

HDFC Bank Fixed Deposit

3.50% - 7.40%

4.00% - 7.90%

ICICI Bank Fixed Deposit

4.00% - 7.50%

4.50% - 8.00%

Axis Bank

3.50% - 7.55%

3.50% - 8.50%

Kotak Bank

3.50% - 7.40%

4.00% - 7.90%

IDFC Bank

4.00% - 8.25%

4.50% - 8.75%

Bank of Baroda

4.50% - 6.85%

5.00% - 7.35%

Citibank

3.00% - 7.00%

3.50% - 7.50%

IDBI Bank

5.75% - 7.25%

5.75% - 7.75%

Indian Bank

4.50% - 6.75%

5.00% - 7.25%

Indian Overseas Bank

4.50% - 6.80%

5.00% - 7.30%

OBC

5.75% - 7.00%

-

PNB

5.75% - 6.75%

6.25% - 7.25%

HDFC

7.70% - 7.70%

7.95% - 7.95%

PNB Housing Finance

8.25% - 8.45%

8.50% - 8.70%

Allahabad Bank

5.00% - 6.75%

-

Andhra Bank

4.00% - 6.80%

% - 7.30%

Bank of India

5.25% - 6.70%

5.25% - 7.20%

Bank of Maharashtra

4.25% - 6.60%

4.25% - 7.10%

Canara Bank

5.75% - 7.00%

6.25% - 7.50%

Central Bank of India

4.80% - 6.65%

5.30% - 7.15%

Dena Bank

4.00% - 6.75%

4.50% - 7.25%

Punjab and Sind Bank

4.00% - 7.00%

4.00% - 7.50%

UCO Bank

4.50% - 6.60%

-

Union Bank of India

5.00% - 6.75%

5.50% - 7.25%

Vijaya Bank

5.00% - 6.80%

5.50% - 7.30%

United Bank of India

4.00% - 6.50%

4.00% - 6.50%

Yes Bank

5.00% - 7.25%

5.50% - 7.75%

Federal Bank

3.50% - 7.30%

4.00% - 7.80%

Bandhan Bank

3.50% - 7.55%

4.25% - 8.30%

HSBC Bank

3.15% - 6.75%

3.65% - 7.25%

South Indian Bank

4.00% - 7.60%

4.50% - 8.10%

IndusInd Bank

3.75% - 8.00%

4.25% - 8.50%

DCB Bank

4.00% - 8.05%

4.50% - 8.75%

Karur Vysya Bank

5.00% - 7.25%

5.00% - 7.75%

DHFL

8.25% - 9.00%

8.65% - 9.40%

LIC Housing Finance

8.15% - 8.30%

8.40% - 8.55%

Bajaj Finserv

8.00% - 8.75%

8.35% - 9.10%

Syndicate Bank

4.75% - 7.05%

5.25% - 7.55%

DBS Bank

4.00% - 7.50%

4.00% - 7.50%

Karnataka Bank

3.50% - 7.50%

4.00% - 8.00%

Dhan Laxmi Bank

4.00% - 7.25%

4.00% - 7.75%

Lakshmi Vilas Bank

4.50% - 8.00%

4.50% - 8.60%

RBL Bank

5.00% - 8.05%

5.50% - 8.55%

Standard Chartered Bank

4.25% - 7.50%

5.00% - 8.00%

Corporation Bank

4.50% - 7.00%

5.00% - 7.50%

Jammu & Kashmir Bank

5.00% - 7.30%

5.50% - 7.80%

SEE ALSO: Bank Rates

What are the Charectarisitcs of Fixed Deposits?

Below mentioned are the main features of fixed deposit:

  • Fixed interest rate: The rate of interest offered on FD depends on interest rates in the economy and would be much higher than savings bank account.
  • Safe investment option: Investing in FD is considered safe and no big banks have defaulted on FD ever.
  • Fixed tenure: You can choose the tenor of your FD based on your requirements. Higher interest rates are offered on longer tenor.
  • Interest payment frequency: You can either choose to receive periodic payments of interest or receive at maturity.
  • Reinvestment: There is an option to reinvest your money at maturity to earn double benefits.
  • Loan against FD: Most banks and NBFCs offer loan against FD.
  • Tax: The interest earned on FD is taxed as per your income tax slab and TDS is deducted if the interest amount earned on FD is in excess of Rs 40,000 a year. This is Rs 50,000 a year for senior citizens.
  • Limit: There is no upper limit when it comes to investing in FD.

What are the Advantages and Disadvantages of Investing in an FD?

Below mentioned is the advantage of investing in FDs:

  • Investing in FD is considered the safest investment option.
  • FD is a long term investment, you can fund your future life events with the returns earned on FDs.
  • Interest offered on FD is much higher than a normal savings account.
  • FD offers fixed rate of return throughout the tenure of investment.
  • You can avail secured loans with low interest rates against FD.

Disadvantages of Investing in FD:

  • Premature withdrawals attract penalties on interest earned.
  • Your money would be locked for the entire duration of the investment tenure.
  • The returns earned on FD may not be inflation beating.
  • You would lose out on opportunities to earn better rate of returns by investing in FD over other options.

How to Open an FD Account and What are the Requisite Documents?

You can open a FD both online and offline. Following are the documents required to open FD:

  • PAN
  • If you don’t have PAN, then you must fill Form 60
  • Valid identity proof
  • Valid address proof

Comparison Of Tax-Saving FD With ELSS

Parameter

ELSS

Fixed Deposit

Investment

ELSS is a tax saving mutual fund where most of the money is invested in equities.

It is a financial instrument offered by banks and NBFCs.

Returns

Depends on the performance of equity market and is not fixed.

The interest rate varies across banks. It ranges between 3-9%.

Tenure

The minimum investment tenure is 3 years.

The minimum tenure is 5 years and the maximum tenure is 10 years.

Lock-in Period

3 years

5 years for tax saver FD

Risk Factor

ELSS has risk. However, usually ELSS gives positive returns over a longer period of time.

It is considered the safest investment option with no risk.

Liquidity

One can withdraw money from ELSS anytime post 3 years.

Tax Saving FD cannot be withdrawn after 5 years.

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