Know All The Fixed Deposit Interest Rates 2020

It is a saving scheme offered by banks and non banking financial companies popularly called NBFCs. These are a type of term deposits that give a fixed rate of interest until maturity. The rate of interest is higher than savings bank account. Interest rates vary across banks. Fixed deposits offer saving and investing opportunity at a single place with no risk involved. 

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Know All The Fixed Deposit Interest Rates 2020

FDs Enjoy The Following Advantages:

• Once you invest in FDs, the returns are assured.
• The investor can choose to receive the interest payouts monthly or annually.
• FDs are much safer than shares.
• FD accounts can be opened for various tenures. It could be as less as 7 days and up to 10 years.
• Majority of banks offer loan against FD. This assists the account holder during a financial emergency.

See Also: Fixed deposit interest rate

Loan Against FD

Loan against FD is a major benefit of fixed deposits. It is a secured loan, where the FD is pledged as security. The amount availed varies depending on the FD amount. It can range from 90-95% of the FD amount. Interest rates on these loans are 1-2% higher than the interest rate on FD. Any FD holder can apply for loan except:

• Minor on whose name FD is opened
• Investors who have applied for 5 year tax saving FD.

How FD Interest Rates are Calculated?

To calculate FD rates, the following formula is used:

A= Amount after maturity

P= Principal amount invested

R= Rate of interest

N= compounding frequency

T= time period of investment

Now,

A = P* (1+R%/N) ^ (N*T)

Let’s understand this better by taking an example. Consider the following figures:

P= Rs 1,00,000

R= 8%

T= 5 years

N=4, as the interest is compounded every 3 months.

Now,

A= 1,00,000 (1+0.08/4) ^ (4*5) = Rs 1,48,595.

There are certain factors which influence the interest rates. These are: 

• If the amount deposited is higher, then interest paid out would be higher.
• Higher FD rates for longer tenure.
• Investing in cumulative FDs will fetch a higher interest rate.

See Also: 7 Tips on How to Invest in High-Interest Fixed Deposits

FD interest rates across banks in India.

Name of Bank	Tenure	General citizens	Senior Citizens
State Bank of India	7 days to 10 years	5% to 6.8%	5.5% to 7.3%
HDFC bank	7 days to 10 years	3.5% to 7.3%	4% to 7.8%
ICICI bank	7 days to 10 years	4% to 7.1%	4.5% to 7.6%
Axis bank	7 days to 10 years	3.5% to 7.2%	3.5% to 7.85%
Canara bank	7 days to 10 years	5% to 6.5%	5.5% to 7%
IDFC bank	7 days to 10 years	4% to 8.5%	4.5% to 9%
Kotak Mahindra bank	7 days to 10 years	3.5% to 6.9%	4% to 7.4%
Bank of Baroda	7 days to 10 years	4.5% to 6.6%	5% to 7.10%
Punjab National bank	7 days to 10 years	5% to 6.75%	5.5% to 7.25%
Yes Bank	7 days to 10 years	5% to 7.25%	5.5% to 7.75%

Small Finance Banks

Name of Bank	Tenure	General citizens	Senior citizens
Ujjivan small finance bank	7 days to 10 years	5% to 8.1%	Additional 0.50%
Jana small finance bank	7 days to 10 years	5% to 10%	5.5% to 11.05%
Equitas small finance bank	7 days to 10 years	5% to 8.25%	Additional 0.60%
AU small finance bank	7 days to 10 years	5.25% to 8%	Additional 5.75% to 8.53%
Fincare small finance bank	7 days to 10 years	4% to 9%	4.5% to 9.5%
ESAF small finance bank	7 days to 10 years	5.5% to 8%	6% to 9.25%
North east small finance bank	7 days to 10 years	4.75% to 8.5%	5.25% to 9%

Deposit Insurance and Credit Guarantee Corporation (DICGC)

This is a subsidiary of RBI launched for the purpose of ensuring guarantees against all bank deposits like saving, current and fixed recurring deposit. A maximum limit of Rs 5,00,000 against each deposit is ensured. DICGC plays a major role in creating trust factor in the minds of the depositors. All banks irrespective of their size are regulated by DICGC.  It has the right to cancel a bank’s registration if it fails to make premium payments for three consecutive half yearly periods.

See Also: Should You Invest In FDs?

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