Which Bank is Best For FD

How to Choose the Best Fixed Deposit?

The following are the factors to consider before applying for an FD:

1. ✅ Compare Interest Rates – Look for the highest returns for your chosen tenure.

1. ✅ Check Bank/Company Credibility – Opt for institutions with strong credit ratings (CRISIL, ICRA).

1. ✅ Select Suitable Tenure – Align FD tenure with your short-term or long-term financial goals.

1. ✅ Decide Interest Payout Type – Cumulative for reinvested growth; non-cumulative for regular income.

1. ✅ Understand Premature Withdrawal Rules – Know penalties and conditions before investing.

1. ✅ Review Tax Implications – Consider TDS deductions and Section 80C benefits if applicable.

1. ✅ Use FD Calculators & Comparison Tools – Estimate returns and compare schemes easily.

1. ✅ Assess Additional Features – Check for nomination facility, loan against FD, and flexibility options.

What are Bank Fixed Deposits?

Bank fixed deposits, one of the most sought-after savings schemes for millions of investors in India, offer higher rates of interest than savings bank accounts. The rates of interests for fixed deposits vary depending on the bank.

Bank fixed deposits are regulated by RBI, which guarantees up to Rs.1 lakh against insolvency of the bank. Bank fixed deposits typically offer lower interest rates compared to corporate fixed deposits but provide assured returns.

How to Choose a Good Bank Deposit Scheme?

1. Unlike corporate fixed deposit schemes, bank fixed deposits schemes are not dependent on ratings.
2. Experts suggest sticking to PSU banks or select private sector banks for safe returns.
3. Investors should consider several parameters such as maturity amount, interest, interest after tax and inflation-adjusted returns among others.
4. You need to zero in on the amount to be held in a fixed deposit in addition to the deposit period.
5. Different banks offer varied interest rates and tenure. Investors need to make a comparative analysis prior to depositing money in a fixed deposit.
6. You have to study the premature withdrawal clauses which vary from bank to bank.
7. Different banks offer several fixed deposit schemes

Top Banks offering high interest rates on FDs

The table below shows the banks the offer the FD scheme at high interest rates:

How to Choose a Good Company FD Scheme?

1. Check the promoters' history, company's repayment record and balance sheet among others. In some cases, a company with a low credit rating is more likely to offer higher rates to attract investors.
2. Investors should avoid companies which offer more than 15% interest rate, companies not paying regular dividends to the shareholder besides partnership firms since it is difficult to ascertain their performance.
3. Investors should stay away from unrated deposit schemes by small manufacturing companies. Only 'A' rated NBFCs are eligible to accept deposits as mandated by RBI. Investors should look for AA or AAA rated companies with enjoy good reputation.
4. Longer the duration of investment, higher is the rate of interest offered. But you should be cautious about investing for a longer duration. It is more advisable to go for shorter duration deposits of around 1 year to 3 years to monitor company's rating and servicing.
5. Experts suggest diversification and investing in several good schemes rather than in just one scheme.
6. Investors should analyze the servicing standards of the company and consult the investment advisor for all transactions.
7. Investors should not only review a company's profile but also its ratings. Ratings are given by credit rating agencies such as ICRA, CRISIL and CARE
8. Investors should also examine the lock in period of the deposit. Most deposit schemes have an initial lock-in of three to six months.
9. Investors should be wary of default risk, i.e, at maturity, companies may not return the amount and default (owing to bad performance and recession among others).
10. While bank deposits are secured by RBI, company deposits have no such back-ups and are, therefore, unsecured.

Top Rated Company Deposit Schemes in India