Fixed Deposit Interest Rate

Fixed deposit facility offered by banks to its existing and new customers along with plenty of financial benefits. As of now banks have started offering higher interest rate on term deposits along with that customer will get higher interest rate as rewards. Even through rate of interest and other factors rely on amount deposited and saved by individual for specific tenure and all applicable benefits will be based on for specific tenure. Sometimes interest rate rely on other banks rates and their term based deposits. Generally interest rates rely between 5% to 7.5% and when it comes to benefits for senior citizen then rates will be between 5.5% to 8%.


One of the best investment instrument to park your hard-earned funds is fixed deposit account, which not only helps the investor to secure their money, but also gives them a great opportunity to earn whopping interest in long-term. Fixed deposit interest rate helps the investor to earn good returns over a period of time. However, the rate of interest varies from bank to bank, subject to certain factors. Thus, it is significant to compare and get the best fixed deposit rates.


Best Banks FD (fixed deposits) Rates for 2020

1. Against deposit currently HDFC bank is offering 7.50% interest rate.
2. Other banks as Bandhan, RBL, Karur Vysya, Tamil Mercantile, Lakshmi Vilas and Deutsche Bank offers 7% interest rate for all existing customers.
3. One thing that customer must remember is benefits offered by banks will rely on their specific criteria and tenure.
4. According to policy of all respective banks individuals will be allowed to deposit their amount from shorter tenure of one week to longer tenure of around 120 months. Best FD (fixed deposit) interest rate offered by banks is subject to change as per market condition and it may go up and down with that condition.



Quick Facts about Fixed Deposits

1. FD helps you to build credit history.
2. FD avails higher interest rate than saving account.
3. FD helps senior citizen to earn higher interest rate.
4. Individual get extra money saving opportunity and options.


Factors affecting the rate of interest on FD accounts:


Size of investment –   The total amount invested has a lot to do with the rate of returns. In fact, many banks have set a criterion regarding the minimum investment value, while there’s no cap on the upper limit. Banks provide comparatively lower interest on low investment value. For instance, if you chose to invest Rs.50000 in a fixed deposit account, then you’ll be entitled to receive the returns at the rate of 6%. On the other hand, if you invest more than Rs.10 lakh, then the fixed deposit interest rate will be somewhere around 8%. Hence, the size of investment is a key factor to determine the rate of interest on FD accounts.

Safe investment –   Unlike other investment instruments such as mutual funds, fixed deposit account are free of market risk. Investments in FD accounts are not market-driven and thus, you don’t have to worry about market fluctuations. Therefore, this is a great instrument to invest in, especially for investors with low-risk appetite.

Tenure of deposit –   How long you keep your deposits in fixed deposit account is yet another factor for banks to zero down on the FD rates. Longer you keep the deposits in account, the better will be the rate of returns. Say for example, bank offers best fixed deposit rates at 6.70% for 1 year, while the interest rates offered for a longer tenure (5 years or more) will be somewhere around 8.90%. So, there’s a clear difference in the interest rates varying in accordance to the tenure of deposit.

Type of investor –   Almost every bank has separate fixed deposit offers for different investors such as individuals, corporate, and senior citizens. Notably, senior citizen fixed deposit accounts has comparatively higher rate of returns ranging from 4% to up to 9.90%.

Best fixed deposit rates from top banks:


Banks FD Rates Senior Citizen FD Rates Tenure
PNB Housing Finance 7.00% - 7.35% 7.25% - 7.60% 1 year to 10 years
Bajaj Finance 6.90% - 7.10% 7.15% - 7.35% 12 months to 5 years
HDFC 6.35% - 6.45% 6.60% - 6.70% 33 months to 66 months
ICICI Home Finance 6.00% - 6.50% 6.25% - 6.75% 12 months to 10 years
SBI 2.90% - 5.40% 3.40% - 6.20% 7 days to 10 years
IDFC First Bank 4.00% - 7.25% 4.50% - 7.75% 7 days to 10 years
Axis Bank 2.75% - 5.50% 2.75% - 6.15% 7 days to 10 years
Kotak Mahindra Bank 2.50% - 5.09% 4.00% - 5.50% 1 years to 10 years
Yes Bank 5.00%% - 7.50% 5.50% - 8.00% 7 days to 3 years
RBL Bank 5.00%% - 6.65% 5.50% - 7.15% 7 days to 20 years

Fixed Deposit Rate of Interest in India 2020

Name of the Bank Regular Customers (per annum) Senior Citizens (per annum)
DCB Bank 4.00% to 7.25% 4.50% to 7.75%
IBDI Bank 5.75% to 6.25% 6.25% to 6.75%
DBS Bank 4.00% to 7.00% 4.00% to 7.00%
Andhra Bank 4.00% to 6.50% 4.50% to 6.50%
Kotak Mahindra Bank 3.50% to 6.66% 4.00% to 7.19%
HDFC Bank 3.50% to 6.50% 4.00% to 7.00%
IndusInd Bank 4.50% to 7.25% 5.00% to 7.75%
Canara Bank 5.75% to 6.00% 6.25% to 6.50%
ICICI Bank 4.00% to 7.00% 4.50% to 7.50%
Bank of Baroda 4.50% to 6.70% 5.00% to 7.30%
Citibank 3.00% to 6.52% 3.50% to 7.11%
Axis Bank 3.50% to 7.25% 3.50% to 7.75%
Karnataka Bank 3.50% to 6.50% 4.00% to 7.00%
Yes Bank 5.00% to 7.25% 5.50% to 7.75%
Punjab National Bank 5.75% to 6.25% 6.25% to 6.75%
Deutsche Bank 4.25% to 8.25% 4.25% to 8.25%
Bank of Maharashtra 4.25% to 6.50% 4.75% to 7.00%
IDFC Bank 4.00% to 7.25% 4.50% to 7.75%
RBL Bank 5.00% to 7.20% 5.50% to 7.70%
South India Bank 4.00% to 7.00% 4.50% to 7.50%
State Bank of India 5.75% to 6.85% 6.25% to 7.35%

Top 5 Tax Saver Fixed Deposit by Banks in India

Name of the bank Tenure Range Range of FD rates in % (in p.a.)

RBL Bank

5 years

7.60%

IDFC Bank

5 years

8.25%

ICICI Bank

5 years

7.25%

Deutsche Bank

5 years

8.25%

Lakshmi Vilas Bank

5 years

7.75%

FD Interest Rates in 2020 for Senior Citizen

Name of the bank Tenure Range Range of FD rates in % (in p.a.)

Axis Bank

7 days to 10 years

3.50% to 8.20%

HDFC Bank

7 days to 10 years

4.00% to 7.90%

ICICI Bank

7 days to 10 years

4.50% to 8.00%

Yes Bank

7 days to 10 years

5.50% to 7.75%

IndusInd Bank

7 days and above

4.25% to 8.50%

Ratnakar Bank Limited (RBL)

7 days to 20 years

5.50% to 8.55%

DCB Bank

7 days to 10 years

4.50% to 8.55%

Deutsche Bank

7 days to 5 years

4.25% to 8.25%

IDFC Bank

7 days to 10 years

4.50% to 8.75%

Karnataka Bank

7 days to 10 years

4.00% to 8.00%

State Bank of India (SBI)

7 days to 10 years

6.25% to 7.35%

Top 5 Non-Banking Financial Company (NBFC) FD rates in India for 2020

Name of the bank Tenure Range Range of FD rates in % (in p.a.)

LIC Housing Finance

1 year to 5 years

8.15% to 8.30%

Mahindra Finance

15 months to 40 months

8.30% to 9.00%

Bajaj Finserv Ltd.

1 year to 5 years

8.00% to 8.15%

PNB Housing Finance

1 year to 10 years

8.25% to 8.45%

Shriram Transport Finance

1 year to 5 years

7.95% to 8.88%

Top 5 Small Finance Bank Fixed Deposit rates in India for 2020

Name of the bank Tenure Range Range of FD rates in % (in p.a.)

Suryoday Small Finance Bank

7 days to 10 years

4.00% to 9.00%

Ujjivan Small Finance Bank

7 days to 10 years

5.00% to 8.60%

Jana Small Finance Bank

7 days to 10 years

6.00% to 9.00%

Utkarsh Small Finance Bank

7 days to 10 years

3.50% to 9.00%

Equitas Small Finance Bank

7 days to 10 years

5.50% to 8.80%

Fixed Deposits Rules Followed by Banks

Investors who look for safe and authentic investment option then FD (fixed deposit) is one of the best option that offers higher return without any complication. Even if interest rate remains high for longer duration. Without taking any major financial risk, fixed deposits is one of the best saving option availed by the bank as even today FD is one of the most preferred choice of saving amount at the same time earning higher amount through higher interest rate. Apart from this FD offers higher liquidity based value that allow all eligible investors to use their amount as per their requirement, at the same time it offers facility to avail loan against FD value. Senior citizen has shown positive response regarding this policy as it offers higher return to then in same duration. To make service easier banks follow certain guideline to make things easier, list is outlined below:

a. TDS (Tax Deducted at Source): There are plenty of people who have perception that income earned through FD interest is tax free but they must always remember that that income will fall under tax related rules and regulations. If someone will try to get out of all this then that person may face some legal action against him/her. Generally 10% TDS will be deducted if total earned amount is more than INR 10000. Although amount paid as tax can be can be reclaimed after filing ITR.

b. FD based Insurance: Customer must know that FD based insurance never get affected by ups and down of market and will offer higher interest rate and benefits accordingly. Credit Guarantee Corporation (DICGC), the deposit insurance along with reserve bank of India (RBI) avails maximum benefits to all users who holds insurance policy on basis of their FD account. Credit Guarantee Corporation (DICGC) is fully liable to pay amount if respective bank fails to settle claim. Up to INR 1 lakhs will be offered as cover to respective investor in case of bank fails to do so.

c. Cumulative deposits: If deposits are cumulative based then interest will be paid after the completion of maturity tenure. Making declaration regarding this point is quite mandatory otherwise TDS will be deducted from the account of investor.

d. Loan Facilities: All FD policy holders are eligible to apply for personal loan and bank will offer then amount as per their eligibility. Customer must know that all banks offers loan amount up to 90% of FD amount but at the same time applicable interest rate will be more than basic interest rate that bank offers to customer. Customer must ensure than maturity tenure of loan must be less than the maturity tenure of FD.

e. Spouse or Minor: Some investors have mindset that FD opened in name of minor will help them to get exemption but this is not reality and tax will be imposed according to law of IT department.

f. Form 15G or 15H: If total earned income through interest rate is less than INR 10000 then customer must fill form 15G or 15H to confirm self declaration. It will allow you to keep yourself away from income tax department policy and rules.

g. Clubbing of Interest: It is responsibility of customer to ensure that all interest earned through recurring deposits and FD. Customer must ensure that TDS will be applicable on recurring deposits as well as interest earned via FD.

Main Factors that affects Fixed Deposits Rates

In these days saving through fixed deposits is one of the traditional ways of saving. As it offers higher return along with safe return assurance, attracts maximum number of small and long term investors. There are still few facts that play important role in finalization of interest rate:

a. Inflation: If prices of goods and other daily need materials increase continuously then all lender and banks scare for devaluation of value of rupees. One of the easiest solutions to get out of other issues is reducing the consumption of that product in that specific duration. To keep customers interested bank offers higher interest rate than regular time.

b. Policies Finalized by Reserve Bank of India (RBI): Reserve bank of India brings several rules and regulations on basis of market research to keep things under control and balance the financial requirement of country. As repo rate changes, it also affects to reverse repo rate. Basically this type of changes affects the vital banking products like loans and fixed deposits (FD).

c. Recession: It refers to condition when unemployment crosses the specific criteria and it also starts affecting current financial condition of respective country. This kind of activity forces reserve bank of India (RBI) to release extra funds to handle the situation. After releasing the fund it also affects to bank products like loans and fixed deposits.

Things that Everyone Should Know about Fixed Deposit (FD) Interest Rate

a. Generally every bank offers the facility of fixed deposits based schemes and it will offer higher interest rate against traditional fixed deposit (FD).

b. FD account based interest rate vary from one to banks and reason behind this is that plans always rely on business plans of respective banks.

c. If individual earns more than INR 10000 as interest annually then fixed deposits will be eligible for TDS.

d. All PSUs (public sector undertakings) have their own offer and interest rate and it will always be different from other respective banks.

e. In specific tenure, banks try to change their rate of interest regularly against high value based deposits; sometimes it may go up to more than one billions.

f. In comparison of general public account, senior citizens get higher interest rate.

g. As company FDs offers higher interest rate to beneficiary but at the same time it is quite risky to invest amount on this kind of policy.

h. FD rates are calculated against amount of liquid cash and that particular time. It also means if banks will need extra amount than they usually require then benefits may reduced for that duration.