The benefits of Fixed Deposits (FDs) as a reliable investment instrument are well known, so if you open a fixed deposit, you are guaranteed returns. However, that quantum of returns will be determined by the interest rate applicable.

Having said that, the rate of interest applicable to FDs are not uniform and differs from one bank to another. So, it is imperative to know off these rates, compare them and then make an informed decision.

Indian Bank’s FD interest rates for amounts less than Rs. 2 crore

Following is a list of some major banks and the FD interest rate they offer –

● SBI tax saving FD has an interest rate of 6.25% p.a. for the general public and 6.75% p.a. for senior citizens.

● Interest rates at Union Bank of India range from 3% to 7.30% for terms of 7 days to 10 years. The interest rates for senior citizens are 8.50% p.a. for one year.

● For regular citizens, the interest rates at Kotak Mahindra Bank are between 2.5% and 5.3%, and for senior citizens, they are between 3% and 5.8%.

● ICICI Bank offers FD rates of 3.00–7.00% p.a. to the general public and 3.50–7.50% p.a. to senior citizens for terms of 7 days–10 years.

● Interest rates at HDFC Bank range from 2.75% to 6.10% for terms of one year to ten years. Senior citizens can get an extra 0.5% per year on their interest rates.

● The general public can get FD interest rates of 3.50–7.25% p.a. from Punjab National Bank, while senior citizens can get rates of 4.00–7.75% p.a. for a tenure of 7–10 years.

● Bank of India gives FD interest rates of 3.00% to 7.05% p.a. to regular citizens and 3.00% to 7.55% p.a. to senior citizens for terms of 7 days to 10 years.

● RBL Bank gives FD interest rates of 3.50–7.80% p.a. to the general public and 4.00–8.30% p.a. to senior citizens for terms ranging from 7 days to 20 years. It is one of the highest rate fixed deposit interest rates for senior citizens

● Canara Bank has terms that last from 7 days to 10 years and interest rates that range from 2.90% to 5.75%. Seniors are given an extra 0.5% per year.

● The general public can get FD interest rates of 2.80%-7.00% p.a. from the Indian Bank, while senior citizens can get 3.30-7.15% p.a. for terms of 7 days or more and up to 5 years.

● Interest rates at Yes Bank range from 3.25% to 7.75% (including special deposit rates) for terms of 7 days to 10 years. The bank gives senior citizens an extra 0.5% interest rate.

● The Bank of Baroda has interest rates that range from 3% to 7.05% for 7-day to 10-year terms. For senior citizens, Bank of Baroda FD rates are calculated by adding 0.5% to the regular rates.

● At Axis Bank, interest rates range from 2.50% to 5.75% for terms of 7 days to 10 years. Seniors can get attractive interest rates from Axis Bank, which range from 2.50 to 6.50%.

Interest rates on FDs in India: Important terms
Timely closure: This means that your FD account is closed when it reaches maturity. When you close your FD account at the end of the term you chose, the bank gives you back the amount you put in plus the interest earned.

Partial withdrawal: Partial withdrawals let you withdraw a portion of your FD amount. However, the bank usually imposes a penalty for this. The rest of your fixed deposit account will earn interest at the original rate.

Breaking an FD account: This contradicts timely FD account closure. Money is withdrawn after maturity in timely closure. Premature withdrawal, or breaking the FD, means withdrawing all the money before maturity.

What are the factors that determine the FD interest rates?
●Repo rate
●Deposit amount and tenure
●Frequency of interest payment
●Renewal

Final words

An FD is a common way to make your money grow while taking a nominal risk. Having said that, if you are planning to open a fixed deposit, you must know the fixed deposit interest rates, as it will aid you to your plan your finances better and making an informed decision.

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