Best Fixed Deposit Rates in India 2025

1. Premature Withdrawal Option → You can break your FD before maturity (with a small penalty).

1. Loan Against FD → Need cash? Get a quick loan against your FD without breaking it.

1. Safety Net → Deposits are insured up to ₹5 lakh per depositor (DICGC insurance).

1. Senior Citizen Perks → Extra interest (usually +0.25% to +0.75%) for seniors.

Benefits of Fixed Deposits (FDs)

1. 🛡️ Zero Risk → No market fluctuations, your money is safe.
2. 📈 Better Than Savings → Earn higher interest than a regular savings account.
3. 🎯 Goal-based Saving → Perfect for short-term goals (gadgets, trips) or long-term plans (education, retirement).
4. 🔄 Auto-Renewal Option → FD can renew automatically on maturity.
5. 💡 Diversification → Great way to balance high-risk investments (like stocks/crypto) with safe returns.
6. 👨‍👩‍👧 Inclusive → Available for students, salaried, NRIs, and senior citizens.

🏦 Types of Fixed Deposits (FDs)

1. Regular Fixed Deposit

1. The classic FD: deposit a lump sum, earn fixed interest till maturity.
2. Tenure: 7 days to 10 years.
3. Suitable for: Anyone wanting safe, guaranteed returns.

2. Tax-saving Fixed Deposit

1. Comes with Section 80C tax benefit (up to ₹1.5 lakh/year).
2. Lock-in of 5 years → cannot withdraw early.
3. Ideal for: Salaried individuals looking for tax savings + assured returns.

3. Flexi Fixed Deposit

1. Hybrid of FD + Savings Account.
2. Extra money from your savings account automatically moves into FD for higher interest.
3. You can also withdraw in parts without breaking the full FD.
4. Perfect for: People who want liquidity + better returns.

4. NRE (Non-Resident External) FD

1. For NRIs to deposit income earned abroad.
2. Interest is tax-free in India.
3. Fully repatriable (principal + interest can be taken abroad).
4. Great for: NRIs who want to grow foreign income in India safely.

5. NRO (Non-Resident Ordinary) FD

1. For NRIs to deposit income earned in India (like rent, dividends).
2. Interest is taxable in India.
3. Repatriation of funds has restrictions.
4. Best for: NRIs who have income sources in India.

📅 FD Rates by Tenure (India 2025)

✅ Short-Term FDs (7 days – 1 year): Short-term FDs are perfect for parking funds temporarily or for immediate financial goals. Interest rates generally range from 3% to 5.5%, depending on the duration. For very short durations like a few weeks, rates are around 3–4%, while FDs closer to a year can earn up to 5.5%.

✅ Medium-Term FDs (1 – 5 years): Medium-term FDs balance safety with better returns. These are ideal for savings goals like travel, courses, or medium-term investments. Interest rates usually range from 5.5% to 7%, with longer durations in this bracket earning higher rates.

✅ Long-Term FDs (5 – 10 years): For long-term wealth building or retirement planning, long-term FDs offer the highest interest. Rates in this tenure can range from 7% to 8%, depending on the bank. Keep in mind that premature withdrawal may reduce your returns.

FD for NRIs (NRE/NRO, FCNR Deposits)

NRIs can invest in NRE, NRO, and FCNR FDs:

1. NRE FDs: Tax-free, fully repatriable deposits of income earned abroad.
2. NRO FDs: Deposits of income earned in India, partially repatriable, taxable interest.
3. FCNR FDs: Held in foreign currency to protect against exchange rate fluctuations, fully repatriable.

Eligibility & Documents

1. Who can open an FD: Residents, NRIs, and senior citizens.
2. Documents required: ID proof, address proof, PAN card, and for NRIs, passport and NRI status documents.

How to Open an FD (Online/Offline)

1. Offline: Visit a bank branch, submit documents, choose tenure and amount, and get a deposit receipt.
2. Online: Use net banking or bank apps, select FD type, tenure, amount, and confirm with OTP. Interest is credited automatically.

Fixed Deposit Application Form

You can obtain the application form to open a fixed deposit by:

Visiting the nearest branch of the bank that you wish to open your FD in.

How Does a Fixed Deposit Account Work?

✅ When you put your money to work in fixed deposits, you basically lock the amount for a fixed period of time. You can earn interest on the principal sum throughout the tenure on a cumulative basis. The interest earned gets added to the principal amount after every specific interval.

✅ Since the tenures are flexible, you have the option to manage multiple FD accounts spread across different tenures. That way, you will be able to earn more on your investments. Senior citizens are eligible for additional rates, usually 0.25% to 0.65% more than the existing rate.

✅ Other than this, even NRIs (Non-resident Indians) can open FD accounts in India in the form of NRE (Non-resident External) and NRO (Non-resident Ordinary) FDs.

✅ You can open a term deposit account with a bank where you already have a savings account. There are banks that let you open an FD account even if you don’t have a savings account with that bank. However, with such banks, you have to go through a KYC process where you have to present relevant documents, including ID proof, address proof, passport size photographs, among others.

Renewals, Premature Withdrawals & Penalties

1. Auto-renewal: FDs can renew automatically on maturity for the same tenure.
2. Premature withdrawal: Allowed but may attract a penalty or reduced interest.
3. Cumulative vs Non-cumulative: Choose whether interest compounds or is paid periodically.

FD Taxation & TDS Rules

1. Interest earned on FDs is taxable under Income Tax rules.
2. Banks deduct TDS if interest exceeds ₹40,000 per year (₹50,000 for senior citizens).
3. NRIs are taxed differently based on residency and type of FD.

FD vs RD: Which to Choose?

1. FD: Single lump sum, fixed interest, ideal for short or long-term goals.
2. RD (Recurring Deposit): Monthly deposits, similar interest, perfect for salaried individuals saving gradually.
3. Tip: If you have a lump sum, FD is better; if you save regularly, RD suits you.

Bank-wise FD Comparison

Different banks offer varying FD rates. Major banks like SBI, HDFC, ICICI, and Axis may offer slightly different rates based on tenure, senior citizen benefits, and special schemes. It’s always recommended to compare bank FD rates online before investing.

FD Calculator

To find out how much interest your fixed deposit will yield for a specific tenure, you can use a free online compound interest calculator. Based on the rate of interest, the FD Calculator will determine how much your deposit will yield at maturity depending on the principal amount. This is calculated based on several factors including the interest compounding frequency which would depend on the bank. It can be on a monthly, quarterly, half-yearly, or annual basis.

Also, Check - RD Calculator

How Fixed Deposit Interest Rates Vary with Central Bank Policies?

✅ The Reserve Bank of India lends to banks at interest rates that can vary based on the prevailing economic conditions. When interest rates are revised by the RBI, banks too may change the interest rates offered on their fixed deposits. This can increase or decrease based on the repo rate (the rate of interest at which the RBI lends to banks).