Fixed deposit are a safe investment option that guarantees consistent interest rates, special interest rates for senior citizens, various interest payment options, and no market-related risks, with income tax deductions. It is important to compare the latest fixed deposit rates among leading banks in the country before opening a new fixed deposit or renewing an existing one. Here are the latest fixed deposit rates for the year 2021.
Know All About FD Interest Rates
Fixed Deposit Interest Rates of Top 10 Banks in India for below Rs.2 crore
Given below are the latest interest rates offered by top banks for tenures ranging from 7 days to 10 years as of January 2021.
| Name of Bank | For General Citizens (p.a.) | For Senior Citizens (p.a) |
|---|---|---|
| State Bank of India | 2.90% to 5.40% | 3.40% to 6.20% |
| ICICI Bank | 2.50% to 5.50% | 3.00% to 6.30% |
| HDFC Bank | 2.50% to 5.50% | 3.00% to 6.25% |
| Punjab National Bank | 3.00% to 5.30% | 3.75% to 5.80% |
| Canara Bank | 2.95% to 5.50% | 2.95% to 6.00% |
| Axis Bank | 2.50% to 5.50% | 2.50% to 6.00% |
| Bank of Baroda | 2.90% to 5.30% | 3.40% to 6.30% |
| IDFC Bank | 2.75% to 5.75% | 3.25% to 6.25% |
| Bank of India | 3.25% to 5.30% | 3.75% to 5.80% |
| Corporation Bank | 3.00% to 5.40% | 3.50% to 5.90% |
Best FD Rates in India among Top 10 Banks
- IDFC Bank offers the highest FD interest rate of 5.75% p.a. which is for a tenure of 500 days for the general public. For senior citizens, the interest rate is 0.50% more.
- The next highest interest rate being offered is 5.50% p.a. for a tenure of up to 5 to 10 years and is being offered by ICICI Bank, HDFC Bank and Axis Bank.
FD Rates Offered by Popular Banks in India for below Rs.2 crore
The fixed deposit interest rates offered by other banks in India are given below for deposits below Rs.2 crore, as of January 2021. These are for tenures ranging from 7 days to 10 years.
| Name of the Bank | General Citizens (p.a.) | Senior Citizens (p.a.) |
|---|---|---|
| Yes Bank | 4.00% to 6.50% | 4.50% to 7.00% |
| IndusInd Bank | 3.25% to 7.00% | 3.75% to 7.50% |
| UCO Bank | 2.75% to 5.00% | 3.00% to 5.40% |
| United Bank of India | 4.00% to 6.50% | 4.50% to 7.00% |
| Union Bank of India | 3.00% to 5.60% | 3.50% to 6.10% |
| Allahabad Bank (now Indian Bank) | 2.90% to 5.15% | 3.40% to 5.65% |
| Central Bank of India | 2.75% to 5.00% | 3.25% to 5.50% |
| Indian Bank | 2.90% to 5.15% | 3.40% to 5.65% |
| Indian Overseas Bank | 3.40% to 5.20% | 3.90% to 5.70% |
| Bandhan Bank | 3.00% to 6.00% | 3.50% to 6.75% |
| DBS Bank | 2.75% to 5.50% | 3.25% to 6.00% |
| Andhra Bank | 3.00% to 5.40% | 3.50% to 5.90% |
| HSBC Bank | 2.25% to 4.00% | 2.75% to 4.50% |
| Syndicate Bank (now Canara Bank) | 2.95% to 5.50% | 2.95% to 6.00% |
| Duetsche Bank | 1.80% to 5.50% | 1.80% to 5.50% |
| SBM Bank | 3.50% to 6.50% | 4.00% to 7.00% |
Best FD Rates in India among Popular Banks
- The highest FD rate among the popular banks in India is 7.00% p.a. which is given by IndusInd Bank for tenures ranging from 7 days to 10 years for the general public.
- For senior citizens, the highest FD rate among popular banks in India is 7.50% given by IndusInd Bank for tenure ranging from 7 days to 10 years.
Top 10 Tax Saver FD Interest Rates
Tax-saver FDs offer a maximum deduction of Rs.1.5 lakh under Section 80C of the Income Tax Act with the maximum deposit permissible being Rs.1.5 lakh. The lock-in period is 5 years. Senior citizens are offered 0.50% additional interest rate.
These are the interest rates as of January 2021.
| Name of the Bank Saving FD | Interest rate offered to General Citizens (p.a.) | Interest rate offered to Senior Citizens (p.a.) |
|---|---|---|
| SBI Bank Tax Saving FD | 5.30% | 6.20% |
| ICICI Bank Tax Saving FD | 5.35% | 5.85% |
| HDFC Bank Tax Saving FD | 5.30% | 5.80% |
| Canara Bank Tax Saving FD | 5.50% | 6.00% |
| Axis Bank Tax Saving FD | 5.75% | 6.25% |
| Bank of Baroda Tax Saving FD | 5.30% | 5.80% |
| IDFC Bank Tax Saving FD | 5.75% | 6.25% |
| Corporation Bank Tax Saving FD | 5.45% | 5.95% |
| PNB Tax Saving FD | 5.30% | 5.80% |
| IDBI Bank Tax Saving FD | 5.10% | 5.60% |
Know more about RD Interest Rates
Best Tax Saver FD Interest Rates
- The highest interest rate on Tax Saver FDs is being offered by IDFC Bank at 5.75% p.a. and 6.25% p.a. for senior citizens.
- The next highest interest rate is 5.50% p.a. which is being offered by Canara bank and Axis Bank for the general public
Highest Small Finance Bank FD Interest Rates for Below Rs.2 crore
Small Finance Banks also provide high interest rates on FDs. Here are the highest interest rates for deposits below Rs.2 crore for tenures ranging from 7 days to 10 years effective from January 2021.
| Name of the Bank | For General Citizens (p.a.) | For Senior Citizens (p.a.) |
|---|---|---|
| Jana Small Finance Bank | 2.50% to 7.25% | 3.00% to 7.75% |
| Utkarsh Small Finance Bank | 3.00% to 7.00% | 3.50% to 7.50% |
| Equitas Small Finance Bank | 3.60% to 7.00% | 4.10% to 7.50% |
Top NBFCs FD Interest Rates (Non-Banking Financial Companies)
NBFCs also offer competitive interest rates on their fixed deposit accounts. Here are the highest interest rates for tenures ranging from 1 year to 5 years for deposits less than Rs.2 crore effective from January 2021.
| Name of the Bank | Tenure | Interest rate offered to General Citizens (p.a.) | Interest rate offered to Senior Citizens (p.a.) |
|---|---|---|---|
| LIC Housing Finance | 12 months to 60 months | 5.65% to 5.75% | 6.15% to 6.25% |
| PNB Housing Finance | 12 months to 120 months | 5.90% to 6.70% | 6.40% to 7.20% |
| ICICI Home Finance | 12 months to 120 months | 4.30% to 6.10% | 4.55% to 6.35% |
| Mahindra Finance | 15 months to 40 months | 5.25% to 6.00% | 5.75% to 6.50% |
| Bajaj Finance | 12 months to 60 months | 5.94% to 6.60% | 6.17% to 6.85% |
| Shriram City Union Finance | 12 months to 60 months | 7.50% to 8.40% | 7.90% to 8.80% |
Factors that Affect FD Interest Rates
There are many factors that affect FD interest rates, some of which are given below:
- Deposit Tenure: The lower the tenure, the lower will be the interest rate and the higher or medium range the tenure, the higher the interest rate will be.
- Deposit Amount: Higher deposit amounts will fetch you higher interest rates, especially bulk deposits exceeding Rs.1 crore.
- Depositor type: Senior citizens typically get 0.25% to 0.50% additional interest rate on fixed deposits.
Features of Senior Citizen Fixed Deposits
Fixed deposits for senior citizens have some features that differentiate them from fixed deposits for the general public, such as:
- The depositor should be 60 years and above at the time of opening the fixed deposit account
- Depending on the bank, interest rates are higher by 0.25% to 0.50%
- The tenure is between 7 days and 10 days
- Loan against FD can be availed
- Penalties for premature withdrawal are the same as for the general public
Flexi Deposit/Auto-Sweep Facility
A flexi fixed deposit is one in which a savings account is linked to the fixed deposit. Some of the features of this kind of deposit are the following:
- Extra savings can be transferred to and from the savings account into the fixed deposit account
- The surplus amounts in the savings account earn a higher interest rate
- Flexible enough to be withdrawn at any time without breaking the FD or paying any penalty
- There are no additional fees for this facility
- Multiple FDs can be linked to one single savings bank account.
Fixed Deposit Calculator
The interest you can earn on your deposited amount depends on multiple factors, including the amount invested, tenure, rate of interest, interest computation frequency, and taxation. You can calculate the returns on your investment by using an FD calculator. The entire process of calculating the amount is easy and hassle-free. All you need to do is enter the deposit term, choose the type of FD (reinvestment, quarterly, or monthly payment), the investment amount, the date of account opening, and the interest rate.
Fixed Deposit Interest and Income Tax
- The income you earn on your FD is termed as Income from Other Source and it is fully taxable.
- Banks will not deduct TDS, if your interest income from fixed deposits is less than Rs.40,000 in a year.
- You need to submit Form 15G and Form 15H with the bank at the beginning of the financial year. Banks will not deduct TDS following the form submission.
Fixed Deposit During Coronavirus/Covid-19
The Reserve Bank of India has announced repo rate cuts which may induce banks to reduce the interest rates on fixed deposits in the future.
Frequently Asked Questions
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What is the minimum period for a fixed deposit?
A fixed deposit account can be opened for a minimum period of 7 days.
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What is the minimum amount that can be deposited in an FD account?
The minimum amount varies from bank to bank. It can be as low as Rs.50.
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Can I get monthly interest on a fixed deposit?
Yes, you can get a monthly interest payout on your fixed deposit.
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Is FD a good investment?
Investing in fixed deposits is one of the safest investment options available. The interest offered on FDs by banks makes it a good option.
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Which bank FD rate is high in 2020?
For a tenure of between 7 days to 10 years and a deposit amount of less than Rs.2 crore, some of the banks that offer the highest FD rates are IDFC Bank, Bank of Baroda, Axis Bank, Canara Bank, Punjab National Bank, HDFC Bank, and SBI.
- Can I prematurely withdraw from a Tax Saver Term Deposit?
No, you can prematurely withdraw a tax saver term deposit as it has a lock-in period of 5 years.
- What is the maximum duration for which a FD account can be opened?
You can open a fixed deposit account for a maximum period of 10 years.
- Do all NBFCs offer the option of opening a FD account with them for a period of 10 years?
No, not all NBFCs offer you open of opening a FD for a period of 10 years.
- What is maximum exemption that I can get under tax saver FDs?
Under tax saver FDs, the maximum exemption you can get is Rs.1.5 lakh.
- Under which section of the Income Tax Act is the tax benefit offered on tax saver FDs?
The tax benefit is offered under Section 80C of the Income Tax Act, 1961.
- Do banks charge a penalty for premature withdrawal of FD?
Yes, banks charge a penalty for premature withdrawal of a FD.
- Which bank is best for fixed deposits?
It is best to choose leading and trusted banks for fixed deposits in India. The top 10 banks are State Bank of India, ICICI Bank, HDFC Bank, Punjab National Bank, Canara Bank, Axis Bank, Kotak Mahindra Bank, Bank of Baroda, IDFC Bank, and Bank of India.
- Which is better for FD, bank or post office deposit?
All fixed deposits, whether in a bank or post office, are not affected by market fluctuations and offer fixed and assured return of interest over the tenure chosen.
- How can I get the maximum returns from my fixed deposit?
To get the maximum returns on your fixed deposit, compare the fixed deposit rates among different tenures in the same bank and among different banks. Make sure that it is not too short nor too long.
