What is a Fixed deposit (FD)?
Fixed deposit (FD) is a investment instrument offered by banks and non-banking financial companies, where you can deposit surplus money for a higher rate of interest than savings accounts. You can deposit a lump sum of money in fixed deposits for a specific period, ranging from 7 days to 10 years. Fixed deposit is also known as a term deposit.
Some banks may offer additional services to FD holders such as loans against FD certificates at competitive interest rates. Now a days the interest rate varies between 4 and 7.50 percent.
Once the money is invested in FD, it starts earning an interest based on the duration of the deposit. Usually, the defining criteria for FD is that the money cannot be withdrawn before maturity, but you may withdraw them after paying a penalty.
Top Features of Fixed Deposit (FD)
- Fixed deposits enable investors to earn higher interest on their surplus funds without any risk.
- You can deposit money in a fixed deposit account only once, but to deposit more money, you need to create another FD account
- Though liquidity in fixed deposits is lesser, you can look for higher rates of interests, which are higher in case of company fixed deposits
- Fixed deposits can be easily renewed
- Tax is deducted at source, from interest on Fixed Deposits as applicable, as per the Income Tax Act, 1961.
- Bank offers Fixed Deposit in flexible tenures ranging from 7 days to 10 years.
- Interest income monthly, quarterly or annually available in Fixed Deposit or FD.
- Partial or full withdrawal facility is available with penalty interest rates in FD.
Advantages of Fixed Deposit (FD) Account
- Interest rates on FD: Interest rates on FDs are fixed when you open the deposit and the rate depends on the term that you wish to hold it for. he interest rate offered on fixed deposits are higher than that on savings account. It is also a safe form of investment where returns are guaranteed.
- Secure investment: A fixed deposit offers guaranteed returns. Unlike market-led investments where returns fluctuate over time, the returns on an FD are fixed when you open the account. Even if interest rates fall after you open a fixed deposit, you will continue to receive the interest decided at the start. FDs are considered much safer than investments in other assets like equity.
- Return on investment: Your return on an FD will depend on the interest rate and the type of deposit you choose. You can opt for a monthly or quarterly pay-out of interest or the reinvestment option, which will give you the benefit of compounding. You can calculate your return of your FD by using Fixed Deposit (FD) Calculator.
- Flexible Tenures: Bank offers Fixed Deposit in flexible tenures ranging from 7 days to 10 years.
- Loan against FD: While FDs are fixed for an agreed tenure, you can take a loan against it when you need funds. Banks offer loans against FD in the form of an overdraft, and you can get up to 90% of your FD amount. The benefit is that your FD continues to earn interest, you don’t have to prematurely withdraw your FD, and end up paying a penalty.
Disadvantages of Fixed Deposit (FD) Account
While Fixed Deposits offer various advantages in terms of guaranteed returns, they also have a few disadvantages, including:
- Low returns: While FD returns are guaranteed, they are also low as compared to other short-term market-linked investments.
- Liquidity: Withdrawing your FD before the date of maturity leads to a penalty charge. You may also get a lower interest on the total investment when you break your FD.
- Tax returns: Interest earned through your FD falls under the taxable slab of your income. If your interest earned is higher than Rs.10,000, it will be deducted as TDS at the rate of 10%. For senior citizens, this minimum amount has been raised to Rs.50,000. To increase your tax benefits from FDs, go with tax-saver FDs. Remember though that if you open a joint account, only the first holder of the deposit can avail the tax benefit as per section 80C of the Income Tax Act, 1961.
Fixed Deposit (FD) Interest Rates
FD rates of banks are determined by changes in RBI monetary policy such as repo rate, base rate etc, internal liquidity position of banks, economic conditions and the level of credit demand. FD interest rates of different banks in India vary by deposit amount, deposit tenure and type of depositor.
Comparative FD interest rates in different banks are tabulated below. Here FD rates range are given for different deposit tenure from 7 days – 10 years.
Compare Fixed Deposit Interest Rates in India:
| Bank Name | Tenors | Rates For Public | Rates for Senior Citizens | As on Date |
|---|---|---|---|---|
| Bank of Baroda | 7 - 14 days | 4.25 | 4.75 | 2024-09-09 |
| Bank of Baroda | 15 - 45 days | 4.5 | 5 | 2024-09-09 |
| Bank of Baroda | 46 - 90 days | 5.5 | 6 | 2024-09-09 |
| Bank of Baroda | 91 - 180 days | 5.6 | 6.1 | 2024-09-09 |
| Bank of Baroda | 181 - 210 days | 5.75 | 6.25 | 2024-09-09 |
| Bank of Baroda | 211 - 270 days | 6.25 | 6.75 | 2024-09-09 |
| Bank of Baroda | 271 days - <1 year | 6.5 | 7 | 2024-09-09 |
| Bank of Baroda | 1 year | 6.85 | 7.35 | 2024-09-09 |
| Bank of Baroda | 1 year - <400 days | 7 | 7.5 | 2024-09-09 |
| Bank of Baroda | 400 days - <2 Years | 7 | 7.5 | 2024-09-09 |
| Bank of Baroda | 2 Years - <3 Years | 7.15 | 7.65 | 2024-09-09 |
| Bank of Baroda | 3 Years - <5 Years | 6.50 | 7.15 | 2024-09-09 |
| Bank of Baroda | 5 Years - <10 Years | 6.50 | 7.50 | 2024-09-09 |
| Bank of Baroda | > 10 years | 6.25 | 6.75 | 2024-09-09 |
| Bank of India | 7 - 14 days | 3.00 | 3.5 | 2024-09-09 |
| Bank of India | 15 - 30 days | 3.00 | 3.5 | 2024-09-09 |
| Bank of India | 31 - 45 days | 3.00 | 3.5 | 2024-09-09 |
| Bank of India | 46 - 90 days | 4.50 | 5 | 2024-09-09 |
| Bank of India | 91 - 179 days | 4.50 | 5 | 2024-09-09 |
| Bank of India | 180 - 210 days | 6 | 6.5 | 2024-09-09 |
| Bank of India | 211 - 269 days | 6 | 6.5 | 2024-09-09 |
| Bank of India | 270 days - <1 year | 6 | 6.5 | 2024-09-09 |
| Bank of India | 1 years - <2 years | 6.8 | 7.3 | 2024-09-09 |
| Bank of India | 2 years - <3 years | 6.75 | 7.25 | 2024-09-09 |
| Bank of India | 3 years - <5 years | 6.50 | 7.25 | 2024-09-09 |
| Bank of India | 5 years - <8 years | 6.00 | 6.75 | 2024-09-09 |
| Bank of India | 8 years - 10 years | 6.00 | 6.75 | 2024-09-09 |
| Canara Bank | 7 - 45 days | 4 | 4 | 2024-09-09 |
| Canara Bank | 46 - 90 days | 5.25 | 5.25 | 2024-09-09 |
| Canara Bank | 91 - 179 days | 5.5 | 5.5 | 2024-09-09 |
| Canara Bank | 180 - 269 days | 6.15 | 6.65 | 2024-09-09 |
| Canara Bank | 270 days - <1 Year | 6.25 | 6.75 | 2024-09-09 |
| Canara Bank | 1 year only | 6.85 | 7.35 | 2024-09-09 |
| Canara Bank | 1 year - <2 years | 6.85 | 7.35 | 2024-09-09 |
| Canara Bank | 2 years - <3 years | 6.85 | 7.35 | 2024-09-09 |
| Canara Bank | 3 years - <5 years | 6.8 | 7.3 | 2024-09-09 |
| Canara Bank | 5 years - 10 Years | 6.7 | 7.2 | 2024-09-09 |
| Central Bank of India | 7 -14 days | 3.50 | 4 | 2024-09-09 |
| Central Bank of India | 15 - 30 days | 3.75 | 4.25 | 2024-09-09 |
| Central Bank of India | 31 - 45 days | 3.75 | 4.25 | 2024-09-09 |
| Central Bank of India | 46 - 59 days | 4.5 | 5 | 2024-09-09 |
| Central Bank of India | 60 - 90 days | 4.75 | 5.25 | 2024-09-09 |
| Central Bank of India | 91 - 179 days | 5.5 | 6 | 2024-09-09 |
| Central Bank of India | 180 - 270 days | 6.25 | 6.75 | 2024-09-09 |
| Central Bank of India | 271 - 364 days | 6.25 | 6.75 | 2024-09-09 |
| Central Bank of India | 1 year - <2 years | 6.85 | 7.35 | 2024-09-09 |
| Central Bank of India | 2 years - <3 years | 7 | 7.5 | 2024-09-09 |
| Central Bank of India | 3 years - <5 years | 6.75 | 7.25 | 2024-09-09 |
| Central Bank of India | 5 years - 10 years | 6.5 | 7 | 2024-09-09 |
| HDFC Bank | 7 - 14 days | 3 | 3.5 | 2024-09-09 |
| HDFC Bank | 15 - 29 days | 3 | 3.5 | 2024-09-09 |
| HDFC Bank | 30 - 45 days | 3.5 | 4 | 2024-09-09 |
| HDFC Bank | 46 - 60 days | 4.5 | 5 | 2024-09-09 |
| HDFC Bank | 61 - 89 days | 4.5 | 5 | 2024-09-09 |
| HDFC Bank | 90 days - 6 months | 4.5 | 5 | 2024-09-09 |
| HDFC Bank | >6 months - 9 months | 5.75 | 6.25 | 2024-09-09 |
| HDFC Bank | >9 months - < 1 Year | 6 | 6.5 | 2024-09-09 |
| HDFC Bank | 1 Year - < 15 months | 6.6 | 7.1 | 2024-09-09 |
| HDFC Bank | 15 months - < 18 months | 7.1 | 7.6 | 2024-09-09 |
| HDFC Bank | 18 months - < 21months | 7.25 | 7.75 | 2024-09-09 |
| HDFC Bank | 21months - 2 years | 7 | 7.5 | 2024-09-09 |
| HDFC Bank | >2 years - 5 years | 7 | 7.5 | 2024-09-09 |
| HDFC Bank | >5 years - 10 years | 7 | 7.5 | 2024-09-09 |
| ICICI Bank | 7 days to 29 days | 3 | 3.5 | 2024-09-09 |
| ICICI Bank | 30 days to 45 days | 3.5 | 4 | 2024-09-09 |
| ICICI Bank | 46 days to 60 days | 4.25 | 4.75 | 2024-09-09 |
| ICICI Bank | 61 days to 90 days | 4.5 | 5 | 2024-09-09 |
| ICICI Bank | 91 days to 184 days | 4.75 | 5.25 | 2024-09-09 |
| ICICI Bank | 185 days to 270 days | 5.75 | 6.25 | 2024-09-09 |
| ICICI Bank | 271 days to < 1 year | 6 | 6.5 | 2024-09-09 |
| ICICI Bank | 1 year to < 15 months | 6.7 | 7.2 | 2024-09-09 |
| ICICI Bank | 15 months to < 18 months | 7.25 | 7.8 | 2024-09-09 |
| ICICI Bank | 18 months to 2 years | 7.25 | 7.75 | 2024-09-09 |
| ICICI Bank | 2 years 1 day to 3 years | 7 | 7.5 | 2024-09-09 |
| ICICI Bank | 3 years 1 day to 5 years | 7 | 7.5 | 2024-09-09 |
| ICICI Bank | 5 years 1 day to 10 years | 6.9 | 7.4 | 2024-09-09 |
| ICICI Bank | 5Y (Tax Saver FD) | 7 | 7.5 | 2024-09-09 |
| PNB | 7 to 14 days | 3.5 | 4 | 2024-09-09 |
| PNB | 15 to 29days | 3.5 | 4 | 2024-09-09 |
| PNB | 30 to 45 days | 3.5 | 4 | 2024-09-09 |
| PNB | 46 to 90 days | 4.5 | 5 | 2024-09-09 |
| PNB | 91 to 179 days | 4.5 | 5 | 2024-09-09 |
| PNB | 180 days to 270 Days | 6.25 | 6.75 | 2024-09-09 |
| PNB | 271 days to less than 1 year | 6.5 | 7 | 2024-09-09 |
| PNB | 1 year | 6.8 | 7.3 | 2024-09-09 |
| PNB | >1 year - 2 years | 6.8 | 7.3 | 2024-09-09 |
| PNB | >2 years - 3 years | 7 | 7.5 | 2024-09-09 |
| PNB | >3 years - 5 years | 6.5 | 7 | 2024-09-09 |
| PNB | >5 years - 10 years | 6.5 | 7.3 | 2024-09-09 |
| Post Office | 1 year | 6.9 | 6.9 | 2024-09-09 |
| Post Office | 2 years | 7 | 7 | 2024-09-09 |
| Post Office | 3 years | 7.1 | 7.1 | 2024-09-09 |
| Post Office | 5 years | 7.5 | 7.5 | 2024-09-09 |
| SBI | 7 days to 45 days | 3.5 | 4 | 2024-09-09 |
| SBI | 46 days to 179 days | 5.5 | 6 | 2024-09-09 |
| SBI | 180 days to 210 days | 6.25 | 6.75 | 2024-09-09 |
| SBI | 211 days to less than 1 year | 6.5 | 7 | 2024-09-09 |
| SBI | 1 year to <2 year | 6.8 | 7.3 | 2024-09-09 |
| SBI | 2 years to <3 years | 7 | 7.5 | 2024-09-09 |
| SBI | 3 years to <5 years | 6.75 | 7.25 | 2024-09-09 |
| SBI | 5 years to 10 years | 6.5 | 7.5 | 2024-09-09 |
| UBI | 7 – 14 Days | 3.5 | 4 | 2024-09-09 |
| UBI | 15 – 30 Days | 3.5 | 4 | 2024-09-09 |
| UBI | 31 – 45 Days | 3.5 | 4 | 2024-09-09 |
| UBI | 46 – 90 Days | 4.5 | 5 | 2024-09-09 |
| UBI | 91 - 120 Days | 4.8 | 5.3 | 2024-09-09 |
| UBI | 121 to 180 Days | 5 | 5.5 | 2024-09-09 |
| UBI | 181 Days to <1 Year | 6.35 | 6.85 | 2024-09-09 |
| UBI | 1 Year | 6.8 | 7.3 | 2024-09-09 |
| UBI | >1 Year to 2 Years | 6.6 | 7.1 | 2024-09-09 |
| UBI | >2 Year to 3 Years | 6.7 | 7.2 | 2024-09-09 |
| UBI | >3 Years to 5 Years | 6.5 | 7 | 2024-09-09 |
| UBI | >5 Years to 10 Years | 6.5 | 7 | 2024-09-09 |
How to Open a Fixed Deposit Account in Banks?
How to Open a Fixed Deposit Account Offline?
While most bank related work happens online these days, some trips to the bank are absolutely unavoidable. In case you’re stuck without a portal through which to create a bank account online, you can follow these steps to open a Fixed Deposit account in bank offline:
Step 1: Research different banks and their interest rates, find the one that best matches your specific requirements, if any, and the type of bank account you wish to open.
Step 2: Take a copy of your identity proof, two photographs, address proof, income / employment proof (if necessary), and age proof and head to the nearest branch of the bank in which you wish to create an account.
Step 3: Once at the bank, tell the clerk you wish to open a Fixed Deposit account, and he or she will hand you an account opening form.
Step 4: Fill out the form as required, and submit the same along with the copies of your identity proof, photographs, address proof, income / employment proof (if required), and age proof to the clerk.
Step 5: The clerk will then submit the application for processing and, depending on which bank you’ve chosen, your account will be opened and functional in any time between 1 and 12 working days.
How to Open a Fixed Deposit Account Online?
The simplest way to conduct banking operations is online, and opening a Fixed Deposit account is a very simple procedure:
Step 1: Research different banks and their interest rates, find the one that best matches your specific requirements, if any, and the type of bank account you wish to open.
Step 2: Log on to the website of the bank in which you wish to open your account. Note that not all banks have online account creation facilities.
Step 3: Fill out the online application form for the Fixed Deposit that meets your needs and submit it along with a digital copy of identity proof, photographs, address proof, income / employment proof (if required), and age proof. Some banks may require you to submit physical copies of your documents for which they will send over an executive.
Step 4: Your details will be verified by the bank’s back-end team, and you will be able to start using your account almost instantly.
Documents Required to Open a Fixed Deposit Account
When customers decide to open a Fixed Deposit account, the bank requires the customer to submit certain documents. They are as follows:
- Proof of age and identity:Any authentic, registered, and recognized document issued by a competent authority, that contains the full name and a recent photograph of the applicant can be used. PAN, Voter ID, Passport, and Driving license are some examples of the documents that are accepted by banks when applying for a Fixed Deposit account.
- Photographs: Most banks require that customers submit at least 2 passport-sized photographs along with their application.
- Proof of address: Any authentic, registered, and recognized issued by a competent authority, which contains the address of the applicant can be used. Customers should keep either a Driving license, Voter’s ID, Passport, Utility bill are among some of the documents that can be submitted to the bank.
- Senior Citizen Card: Almost all banks offer Senior Citizen Fixed Deposit accounts to their customers. Applicants who wish to open a senior citizen’s account are required to submit proof of their age. A senior citizen card is issued by the Social Welfare Department and is the document that is most preferred as proof.
Depending on the applicant and the type of account being opened, the bank could ask for a few more proofs of identification, age, address, and employment.
Calculate your return of your FD by using Fixed Deposit (FD) Calculator.
