Best Fixed Deposit Rates Today
Fixed deposits remain India’s safest investment, offering guaranteed returns of 6-9.5% annually with zero market risk. Senior citizens earn additional 0.50% on all FD rates. Small finance banks and select NBFCs offer highest FD interest rates, up to 9.5%, while major banks provide 6.5-8.2%.
Top Banks FD Rates Comparison
State Bank of India (SBI) – 6.50% to 7.00% for 1-5 year tenures. Senior citizens get 7.50%. Minimum ₹1,000 deposit. DICGC insured up to ₹5 lakh.
HDFC Bank Fixed Deposit – 7.00% for general public, 7.50% for senior citizens on 3-5 year FDs. Special rates of 7.75% on 5 year 5 month tenure. Online booking available.
ICICI Bank FD Rates – 7.10% regular, 7.60% senior citizen for 2-3 year deposits. Premature withdrawal allowed with penalty. Auto-renewal facility available.
Axis Bank Fixed Deposit – 7.25% for 2-3 years, 7.75% for seniors. Special FD schemes for women offering extra 0.10%. Tax-saver FD at 7.00% with Section 80C benefits.
Kotak Mahindra Bank – 7.20% for 1-2 years. Digital FD opening through mobile app with instant confirmation. Flexible tenure from 7 days to 10 years.
Small Finance Banks – Highest Rates
Ujjivan Small Finance Bank – Up to 9.00% for 18-month FDs. Senior citizens earn 9.50%. Minimum deposit ₹1,000. RBI-regulated and DICGC insured.
Utkarsh Small Finance Bank – 8.75% for general public, 9.25% seniors on select tenures. Higher rates compensate for smaller branch network.
Suryoday Small Finance Bank – 8.50% regular, 9.00% senior citizens. Good for maximizing returns while maintaining safety through deposit insurance.
AU Small Finance Bank – 7.75% for 3-year FD. Reputed small finance bank with growing network. Offers sweep-in facility linking FD with savings account.
Fincare Small Finance Bank – 8.25% for regular customers, 8.75% seniors. Strong presence in South India. Online FD booking available.
Post Office and Government Schemes
Post Office Time Deposit – 7.00% for 5-year FD. Completely government-backed safety. Available at 1,55,000+ post offices across India. No maximum limit.
National Savings Certificate (NSC) – 7.70% for 5 years with compounding. Eligible for Section 80C deduction up to ₹1.5 lakh. Lock-in period of 5 years.
Senior Citizen Savings Scheme (SCSS) – 8.20% quarterly interest for those above 60 years. Maximum investment ₹30 lakh. 5-year tenure extendable by 3 years.
Kisan Vikas Patra (KVP) – 7.50% with money doubling in 115 months. No maximum limit. Transferable and can be pledged as loan collateral.
Corporate Fixed Deposits
Bajaj Finance FD – Up to 8.85% for 44 months. Highest rated NBFC with AAA/FAAA rating. Minimum ₹15,000. Not covered by DICGC insurance but highly rated.
Mahindra Finance Fixed Deposit – 8.40% for 36 months. Additional 0.25% for senior citizens. MAA+ rating from ICRA. Online FD booking available.
Shriram Finance FD – 9.00% for select tenures. Higher returns but slightly lower credit rating (AA+). Invest only if comfortable with marginally higher risk.
FD Tax Implications
TDS (Tax Deducted at Source) – Banks deduct 10% TDS if annual interest exceeds ₹40,000 (₹50,000 for senior citizens). Submit Form 15G/15H if total income is below taxable limit to avoid TDS.
Interest Taxation – FD interest is fully taxable as “Income from Other Sources” at your income tax slab rate. No tax benefits except tax-saver FDs under Section 80C.
Tax-Saver FD – 5-year lock-in fixed deposits qualify for ₹1.5 lakh deduction under Section 80C. Interest remains taxable. SBI offers 6.50%, HDFC 7.00% for tax-saver FDs.
FD vs Other Investment Options
FD vs Savings Account – Savings accounts offer 2.70-3.50% versus FD’s 7-9%. Keep only 3-6 months expenses in savings, move rest to FD for better returns.
FD vs Debt Mutual Funds – Debt funds offer 6-8% returns with better tax treatment for investments over 3 years. However, market risk exists unlike guaranteed FD returns.
FD vs Recurring Deposit (RD) – RD allows monthly deposits (₹500-₹50,000) versus lump sum FD. Both offer similar interest rates. Choose RD if you want to save monthly.
FD vs Gold – Gold historically returns 8-10% long-term but with volatility. FD provides stable, predictable returns ideal for conservative investors or short-term goals.
Maximizing FD Returns
Laddering Strategy – Split investment across multiple FDs with different maturity dates (1 year, 2 year, 3 year). Provides liquidity plus captures rate changes over time.
Cumulative vs Non-Cumulative – Cumulative FD compounds interest, paid at maturity. Non-cumulative pays monthly/quarterly interest. Choose cumulative for higher returns if you don’t need regular income.
Senior Citizen Benefits – Those above 60 automatically earn extra 0.50% on all bank FDs. Take advantage of SCSS (8.20%) which is exclusive to seniors.
Sweep-in Facility – Link FD with savings account. Excess funds automatically convert to FD. Withdrawals automatically break FD only for needed amount, maximizing interest.
Online FD Booking – Banks offer 0.10-0.25% extra for FDs booked online versus branches. Small difference but adds up on large deposits.
Premature Withdrawal
Most banks allow premature FD withdrawal with penalties of 0.50-1.00% on applicable interest rate. Banks pay interest for actual period held at reduced rate.
Example: 3-year FD at 7% withdrawn after 1 year. Bank pays 1-year FD rate (6%) minus penalty (0.50%) = 5.50% for the period held.
Loan Against FD – Better alternative to premature withdrawal. Banks provide 90-95% of FD value as loan at FD rate + 1-2%. FD continues earning full interest.
Safety and Insurance
Bank FDs are insured by DICGC (Deposit Insurance and Credit Guarantee Corporation) up to ₹5 lakh per bank including principal and interest. Spread deposits across multiple banks if amount exceeds ₹5 lakh.
Small finance banks, despite higher rates, are RBI-regulated and DICGC-insured, providing same safety as big banks for deposits up to ₹5 lakh.
Corporate FDs (Bajaj Finance, Mahindra Finance) are NOT DICGC insured. Safety depends on company’s credit rating. Only invest in AAA/FAAA rated companies.
Special FD Schemes
Women Special FD – Some banks offer additional 0.05-0.10% for FDs in women’s names. Check with your bank for such schemes.
Tax-Saver FD – 5-year lock-in with Section 80C benefits up to ₹1.5 lakh. Lower liquidity but tax savings benefit those in higher brackets.
Quarterly Interest FD – For retirees needing regular income. Interest paid quarterly provides steady cash flow for expenses.
Flexi FD – Allows partial withdrawals without breaking entire FD. Some banks charge for this facility but provides flexibility.
Choosing Right FD
For emergency fund (3-6 months expenses): Choose liquid funds or sweep-in FD for quick access.
For short-term goals (1-3 years): Regular bank FD with tenure matching goal date.
For medium-term (3-5 years): Small finance banks for higher returns or tax-saver FD for tax benefits.
For senior citizens: SCSS (8.20%) up to ₹30 lakh, then senior citizen FD rates (7.50-9.50%) from various banks.
For conservative investors: Stick to major banks (SBI, HDFC, ICICI) despite slightly lower rates for maximum safety.
For return maximization: Small finance banks or top-rated corporate FDs if comfortable with marginally higher risk.
Fixed deposits provide guaranteed returns with complete capital safety, making them ideal for conservative portions of your portfolio. While returns are lower than equity long-term, the peace of mind and predictability make FDs essential for emergency funds, short-term goals, and senior citizen income needs.
Disclaimer
Information is educational only. FD rates change frequently based on RBI policy and bank decisions. Verify current rates directly with banks. Tax treatment depends on individual circumstances. Corporate FDs carry credit risk despite high ratings. Consult financial advisors for personalized investment advice.