Best Fixed Deposit Interest Rates - Compare All Bank FD Rates

What is a Fixed Deposit?

A fixed deposit (FD), also known as a term deposit, is a secure investment option offered by banks and nbfcs that allows individuals to deposit a lump sum deposit amount for a fixed tenure and earn fixed deposit interest. The interest payout can be received on a monthly, quarterly, or yearly basis, or at maturity, depending on the depositor's preference.

FDs offer higher interest rates compared to a regular savings account, along with the benefits of capital protection and income certainty. This makes them an attractive choice for senior citizens, conservative investors, and those seeking stability during a financial year.

Fixed deposits also come with deposit offers from various bank offers, and can help in tax planning under the Income Tax Act, especially when held for five years or more. While premature withdrawal is allowed, it may impact the applicable FD interest rate and incur penalties. Despite this, FDs remain one of the most preferred tools for meeting short-term goals, managing emergency funds, or planning retirement savings with assured returns.

FD Interest Rates

Fixed Deposits, also known as FDs or term deposits, are a widely preferred investment option in India due to their stability and predictable returns. With a fixed deposit, you can park a specific deposit amount for a predetermined period and earn assured fixed deposit interest at an agreed rate. The interest payout can be received monthly, quarterly, or at maturity, making it suitable for various financial needs.

The FD interest rate reflects the percentage of return you earn on the principal over the chosen tenure. These deposit interest rates vary based on the duration of the deposit, economic conditions, and guidelines issued by the regulatory authority. Factors like inflation trends and the overall monetary environment influence how interest rates are set.

Top Banks Offering Highest FD Interest Rates

Currently, FD interest rates offered by scheduled banks range between 2.50% p.a. and 8.50% p.a. for regular depositors, depending on the tenure, which can span from 7 days to 10 years. Small finance banks and NBFCs tend to offer the highest FD interest rates, making them attractive for those seeking higher interest rates on their savings. These rates are especially beneficial for senior citizens, who often receive an additional interest premium.

How to Choose the Best FD Rate?

• Compare Interest Rates: Look for banks offering the highest interest rates for your preferred tenure.
• Check Bank Credibility: Ensure the bank is reputable and has good customer service ratings.
• Consider Tenure Options: Longer tenures typically offer higher interest rates.
• Senior Citizen Rates: If eligible, always check for additional interest rates for senior citizens.
• Premature Withdrawal: Understand the penalty charges for early withdrawal before investing.
• Interest Payout Options: Choose between monthly, quarterly, annual, or maturity payouts based on your needs.

Fixed Deposit Rates for Senior Citizens

Banks and NBFCs typically offer senior citizens an additional interest rate of 0.50% p.a. over and above the standard fixed deposit interest rates applicable to general depositors. In addition to this, many banks run special deposit offers under specific schemes or tenures, providing an extra 0.20% to 0.50% interest over the existing senior citizen FD rates.

For example, ICICI Bank offers senior citizens an extra 10 basis points (0.10%) on term deposits with tenures between 15 and 18 months, in addition to the standard 50 basis point senior citizen premium.

Moreover, select banks and small finance banks extend enhanced benefits to super senior citizens (individuals aged 80 and above). Indian Bank, for instance, provides an additional 0.75% p.a. on fixed deposits of up to 5 years and 1% p.a. on tenures ranging from above 5 years up to 10 years. These higher FD interest rates help senior and super senior citizens grow their retirement savings while maintaining stability and a predictable interest payout.

Key Features of Fixed Deposits

Fixed Deposits (FDs) offer guaranteed returns, flexibility, and safety, making them ideal for both short-term and long-term financial planning. Here are the key features of FDs you should know:

• Lucrative Returns: FD interest rates are generally higher than those offered by a regular savings account, providing better interest income over a fixed tenure. Certain bank offers and schemes from small finance banks also provide higher interest rates to maximise your returns.
• Senior Citizen Benefits: Most banks, including HDFC Bank, offer preferential fixed deposit interest rates and income tax benefits under the Income Tax Act for senior citizens aged 60 and above.
• Interest Payout Options: You can choose the interest payout frequency–monthly, quarterly, annually, or at maturity, depending on whether you need regular income or want to reinvest.
• Flexible Tenure Choices: You can select FD tenures ranging from 7 days to 10 years. The deposit interest rates vary based on the tenure you choose, aligning with your financial year planning and savings goals.
• Instant Booking & Digital Access: Most banks allow you to instantly open a fixed deposit via NetBanking or mobile apps, making the process hassle-free and paperless.
• Premature Withdrawal: While FDs are meant to be held until maturity, many banks offer premature withdrawal options, albeit with certain penalties. This provides liquidity in case of emergencies.
• Autorenewal Facility: Banks can automatically renew your fixed deposit at the end of its term, based on prevailing FD interest rates, unless instructed otherwise.
• Nomination Option: You can assign or update a nominee anytime during the FD tenure, ensuring a smooth transfer process for your beneficiaries.

Types of Fixed Deposits

Banks and Non-Banking Financial Companies (NBFCs) offer various fixed deposit schemes to meet the diverse needs of depositors. Whether you're planning for long-term wealth accumulation, tax savings, or liquidity management, there's a term deposit suited to your financial goals. Here are the main types of FDs available in India:

1. Standard Fixed Deposit

This is the most common type of fixed deposit, available to resident Indians, sole proprietorships, partnership firms, limited companies, and Hindu Undivided Families (HUFs). These FDs offer fixed deposit interest rates that are generally higher than savings account interest rates. Investors can choose their preferred tenure, ranging from a few days to several years, and enjoy the benefit of interest payout at maturity or on a regular basis.

2. Tax-Saving Fixed Deposit

Offered only to resident individuals and HUFs, this FD scheme comes with a mandatory lock-in period of 5 years. Under Section 80C of the Income Tax Act, depositors can claim a deduction of up to ₹1.5 lakh on the deposit amount, making it a preferred investment option for income tax planning. Note: Premature withdrawal is not permitted in this scheme.

3. Floating Rate Fixed Deposit

Unlike traditional FDs, this option links the fd interest rate to a benchmark such as the Reserve Bank of India's repo rate or Treasury bill yield. As a result, the returns vary depending on fluctuations in the reference rate. This type of FD is suitable for those willing to take some market-linked risk in exchange for potentially higher interest rates.

4. Flexi Fixed Deposit

Also known as a sweep-in FD, this scheme links the FD with a savings account or current account. If your account has insufficient funds, a portion of the linked FD is automatically broken to cover the shortfall. The remaining amount continues to earn the applicable fixed deposit interest rate. This option combines the liquidity of a savings account with the higher returns of a term deposit.

5. Senior Citizen Fixed Deposit

Exclusively for individuals aged 60 and above, this FD scheme offers an additional interest rate, typically 0.50% p.a. over the standard FD rates. Some banks and NBFCs also run deposit offers under special tenures, providing further benefits of 0.20%–0.30% extra interest. Super senior citizens (aged 80+) may receive even higher preferential rates—up to 1% more—on select tenures, making this ideal for retirement savings.

6. Corporate Fixed Deposit

Issued by Housing Finance Companies (HFCs) and NBFCs, these FDs offer higher interest rates than traditional bank FDs. They can be a viable alternative for investors looking for slightly riskier but rewarding investment options outside the banking system.

7. Cumulative Fixed Deposit

With this FD, the interest income is compounded and reinvested along with the deposit amount, offering substantial gains at maturity. This is ideal for long-term investors who do not require regular interest payout.

8. Non-Cumulative Fixed Deposit

Designed for those seeking periodic income, this FD pays out interest at regular intervals—monthly, quarterly, half-yearly, or annually. It's a popular choice among senior citizens and retirees who rely on fixed interest payouts for day-to-day expenses.

9. Callable Fixed Deposit

This variant allows premature withdrawal before the FD matures. While convenient during emergencies, banks may charge a penalty, and the fd interest rate may be lower compared to non-callable options.

10. Non-Callable Fixed Deposit

In contrast to callable FDs, these do not allow premature withdrawal. In exchange for this restriction, banks typically offer higher interest rates, making it a solid choice for investors who can stay locked in until maturity.

Each of these fixed deposit schemes serves a specific purpose–from income tax planning to emergency fund creation or earning higher returns than a savings account. Before choosing one, assess your liquidity needs, risk appetite, and financial goals to make the most of your deposit.

Types of Fixed Deposits for Non-Resident Indians (NRIs)

Indian banks offer various types of fixed deposits tailored to meet the needs of Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs). These term deposit schemes allow NRIs to securely invest their foreign or domestic income while earning fixed deposit interest with flexible interest payout options. Here's a breakdown of the main FD types available to NRIs:

1. NRE (Non-Resident External) Fixed Deposit

Designed for NRIs and PIOs who wish to deposit their foreign earnings in Indian banks, this deposit option allows the amount to be held in Indian Rupees. The interest income earned is tax-free in India, and both principal and interest are fully repatriable. It's an attractive investment option for those looking to park overseas income with higher interest rates than what is typically available abroad.

2. NRO (Non-Resident Ordinary) Fixed Deposit

This type of FD is suitable for NRIs who want to deposit income earned in India, such as rent, dividends, or pension. The fixed deposit interest earned is subject to income tax in India, and funds are repatriable up to a prescribed limit after tax deduction. These deposit accounts allow NRIs to manage their Indian income effectively.

3. FCNR (Foreign Currency Non-Resident) Fixed Deposit

Ideal for NRIs and PIOs who want to maintain deposits in a foreign currency (like USD, GBP, EUR, etc.), the FCNR deposit eliminates exchange rate risk. The funds deposited must be earned overseas, and the interest earned is tax-free in India. It ensures capital protection and currency stability while earning consistent FD interest.

4. RFC (Resident Foreign Currency) Fixed Deposit

This type of FD is available to returning NRIs or PIOs who have been residing abroad for at least one year and are now returning to India. RFC accounts allow them to open fixed deposits in foreign currency using funds earned abroad. These deposits are exempt from exchange rate risk and offer competitive interest rates, making them ideal for wealth repatriation during the transition back to Indian residency.

These NRI deposit options provide both flexibility and attractive returns, while also helping in financial year planning and mitigating currency volatility. NRIs can choose based on the source of income, currency preference, and income tax implications to make the most of their fixed deposit investments.

Benefits of Fixed Deposits

Fixed deposits (FDs) are one of the most reliable investment options for individuals seeking safety, stability, and predictable growth. Here are some key advantages of opening an FD:

• Guaranteed Returns: With assured fixed deposit interest, FDs offer consistent and risk-free interest income, making them ideal for conservative investors and senior citizens.
• Deposit Insurance Protection: Your deposit amount, including fd interest, is insured up to ₹5 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC), offering added capital protection.
• Tax Benefits: By investing in tax-saving fixed deposits, you can claim a deduction of up to ₹1.5 lakh under Section 80C of the Income Tax Act. This makes FDs a smart choice for income tax planning in a financial year.
• Collateral for Loans & Credit: You can pledge your FD to avail of loans or secured credit cards from banks. This allows you to meet financial needs without opting for premature withdrawal, so your FD interest earnings continue uninterrupted.

Eligibility Criteria for Opening a Fixed Deposit

Most banks and small finance banks in India offer fixed deposit schemes to a wide range of customer segments. The following entities are eligible to open a term deposit and earn fixed deposit interest:

• Resident Individuals
• Hindu Undivided Families (HUFs)
• Sole Proprietorship Firms
• Partnership Firms
• Limited Companies
• Trust Accounts and other eligible entities

These groups can invest a specific deposit amount and choose from various interest payout options such as monthly, quarterly, or at maturity. Additionally, some may qualify for deposit offers and higher interest rates based on tenure, amount, or special customer categories like senior citizens.

Documents Required to Open a Fixed Deposit (FD)

Opening a fixed deposit (FD) is a simple process, especially if you already have a savings account with the bank. In most cases, existing customers don't need to submit additional documents, as the bank already holds their KYC (Know Your Customer) details.

However, for new customers, submitting identity and address proof is mandatory to comply with regulatory guidelines issued by the Reserve Bank of India. To open a term deposit account, the following documents are typically required:

• Aadhaar Card
• PAN Card
• Passport
• Driver's License
• Recent passport-sized coloured photographs

These documents are necessary for KYC verification and to ensure smooth processing of your deposit account. Once verified, you can invest a suitable deposit amount, choose your preferred tenure, and start earning fixed deposit interest with options for monthly or quarterly interest payout.

How to Open an FD online?

Opening a fixed deposit online is quick, convenient, and completely paperless. Most banks and small finance banks allow customers to book a term deposit through their net banking portal or mobile banking application.

If you're an existing customer with a savings account, you can log in to your internet banking or mobile app, select the deposit amount, choose your preferred tenure, and opt for a suitable interest payout frequency–monthly, quarterly, or at maturity. Once submitted, your FD is instantly created, and you start earning fixed deposit interest right away.

New customers may need to complete KYC verification by submitting basic documents such as Aadhaar and PAN before booking the FD online.

Digital FD booking also allows you to explore ongoing bank offers, compare FD interest rates, and access special schemes like senior citizen fixed deposits, tax-saving FDs, and premature withdrawal options, making it a seamless and flexible investment option.

How to Open a Fixed Deposit (FD) Offline?

To open a fixed deposit offline, customers can visit the nearest branch of their preferred bank or deposit-taking NBFC. Alternatively, they can also connect with authorised business correspondents, agents, or bank employees who assist with the FD account opening process. Once the required KYC documents and deposit amount are submitted, the term deposit is created, and the customer begins earning fixed deposit interest based on the chosen tenure and interest payout frequency.

How to Choose the Right Fixed Deposit?

Selecting the right fixed deposit (FD) depends on your investment goals, tenure preferences, and liquidity needs. Before booking an FD, consider the following:

• Compare FD interest rates across banks and NBFCs to maximise returns.
• Decide between cumulative (interest paid at maturity) and non-cumulative (regular payouts) options based on your cash flow needs.
• Look for special FD schemes with higher rates for senior citizens or specific tenures.
• Check for added features like: Loan against FD, Secured credit cards, Sweep-in/sweep-out facilities for better liquidity
• Align the FD scheme with your financial planning to get the best value for your investment.