Fixed deposits are a safe and reliable investment vehicle for conservative investors to earn consistent returns over a long period of time. Unlike just keeping your money in a savings account, a fixed deposit or FD lets you deposit a large sum of money in a financial institution for a fixed period of time and at a fixed interest rate. Higher interest rates are also available on FD as compared to savings account.
FD is a great financial tool to save for specific goals and it can also be automated, so that a fixed amount is automatically deducted from your bank account every month and deposited separately. On completion of the FD tenure (which can range from 7 days to 10 years), you can get your principal amount and interest deposited in your account or if you like the interest rates, you can renew it as an FD again. However, before investing in FD, it is better to do some research about the options available and the current interest rates. The best way to do this is to compare the interest rates offered by different banks.
Overall, most banks offer higher interest on medium to long term deposits as compared to short term deposits. Generally, interest rates on deposits made for more than three years are slightly reduced. Additionally, almost all banks offer slightly higher interest rates to senior citizens (people above 60 years of age) than general investors.
State Bank of India (SBI)
The highest interest rate on FD in India’s largest government bank is available on deposits with a tenure of two years to less than three years. According to the data available on the official website of the bank, this rate is 6.45% for common people and 6.95% for senior citizens. SBI also has the option of deposit for senior citizens with a tenure ranging from 5 years to 10 years, on which they get a higher return of 7.05% compared to 6.05% for general customers.
Kotak Mahindra Bank
Kotak Mahindra Bank offers the highest interest rate of 7.20% to senior citizens who invest in deposits with a tenure of one year three months to one year six months (and less than three years). For regular customers, as per the data available on the official website, the highest interest rate offered by the lender is 6.70%. This rate is applicable on FDs with tenures ranging from one year and three months to one year and six months and less than three years.
HDFC Bank
HDFC Bank offers the highest interest rate of 6.95% to senior citizens who invest in FDs with a tenure ranging from 18 months to three years. For regular customers, as per data available on the official website, the highest interest rate offered by India’s largest private sector lender is 6.50%. This rate is applicable for deposits of more than three years and less than five years (four years and seven months).
Yes Bank
According to the data available on the bank’s official website, this private lender offers the highest interest rate of 7.75% to senior citizens who invest in deposits with tenure ranging from three years to more than five years. This is also the highest rate offered among the largest banks listed in this article. Additionally, for regular customers, the highest interest rate offered by Yes Bank is 7%. This rate is applicable on FDs of one and a half years to more than five years.
ICICI Bank
According to data available on the bank’s official website, India’s second largest private bank offers the highest interest rate of 7.10% to senior citizens who invest in deposits of three to five years and tax saver FDs of five years. For regular customers, the highest interest rate offered by ICICI Bank is 6.50%. This rate is applicable on deposits of 3 to 10 years and tax saver FD of five years.