In India, fixed deposits are the most popular investment option. For years, FDs have been associated with investment because they are deemed safe, give assured returns over time, and have a flexible length. You will receive fixed returns regardless of how interest rates change or how the economy operates. You also receive interest on the interest. This allows you to quickly accumulate a large sum of money.
The rate of interest varies by a banking institution, although it is typically higher than the rate of interest paid on savings accounts. Fixed deposits are available for a variety of time periods, ranging from 7-14 days to 10 years. A term deposit is another name for a fixed deposit.
Benefits of FDs
-
Assured returns
Market-linked securities may result in losses due to market volatility, but fixed deposits provide a guaranteed rate of return on investments. Your savings/investment remains safe in FDs, and returns are usually higher than in savings accounts.
-
Compounding Benefits
In FD, you can earn interest on interest, thereby enjoying higher returns and faster growth of money.
-
Minimum Investment is Low
If you want to instill an investment habit but do not have a big sum to do so, FDs are a suitable option because investment amounts begin as low as Rs. 5000, but this will vary from one bank to another.
-
Liquidity
Premature withdrawal of FDs is permitted. This gives you the advantage of liquidity since you can liquidate the Fixed Deposits in times of emergency. However, you will lose some interest in the missed duration.
-
Straightforward Process
FDs are the most straightforward instruments to invest in, both online and offline.
-
Heightened interest rates for senior citizens
Senior citizens can make more from their life’s savings by investing in FDs as they offer more interest and progress one step closer to the desired retired life.
Fixed Deposit Interest Rates
Before forming a new FD account or renewing an existing one, it is critical to compare the latest FD rates provided by the country’s leading banks. The following are the current fixed deposit rates for 2022.
-
The interest rate in SBI bank fixed deposit with terms ranging from seven days to ten years, as well as a variety of appealing features and bonuses. Senior citizens are eligible for a 0.8 percent increased interest rate. The general public’s interest rates range from 2.90 percent to 5.50 percent per annum.
-
IDFC Bank gives the highest FD interest rate of 6.25 percent p.a. to the general public for a term of 5 years or more. The interest rate for senior citizens might reach 6.75 percent.
-
Axis Bank offers the second-highest interest rate of 5.75 percent per annum for a term of 5 years or more.
-
The third highest interest rate is 5.60 percent p.a., which is offered by HDFC for terms of 5 years or more.
-
Deutsche Bank offers the highest FD rate of 7.00 percent per annum among India’s major banks for tenures ranging from 3 to 7 years for the general public.
Highest FD Rates in India
If fixed deposit interest rates are rising, the RBI is encouraging people to save and discouraging them from spending. Borrowings may also become more expensive when the bank raises interest rates to cover its cost of funding. If interest rates are lowering, it suggests that efforts are being made to encourage people to spend more money on goods, commodities, and services.
Borrowings will become less expensive, allowing people to spend more. This, in turn, directs the flow of money throughout the economy. Some of the banks with the highest FD rates in India.
-
IndusInd Bank offers the highest interest rate on Tax Saver FDs for the general population, at 6.50 percent per annum.
-
At 5.75 percent p.a., Axis Bank and Canara Bank have the second-highest interest rates for the general population.
-
IndusInd Bank provides the highest interest rate for older folks at 7.00 percent per annum, while Axis Bank offers 6.50 percent.
Top 10 Tax Saver FD Interest Rates
Here is the list of top tax-saving FDs along with interest rates for general and senior citizens, respectively.
Name of the Tax Saving FD
1) For general citizens (p.a.)
2) For Senior Citizens (p.a.)
SBI Bank Tax Saving FD
For general citizens (p.a.): 5.30%
For Senior Citizens (p.a.): 5.80%
IndusInd Bank Tax Saver Scheme
For general citizens (p.a.): 6.50%
For Senior Citizens (p.a.): 7.00%
HDFC Bank Tax Saving FD
For general citizens (p.a.): 5.45%
For Senior Citizens (p.a.): 5.95%
Canara Bank Tax Saving FD
For general citizens (p.a.): 5.75%
For Senior Citizens (p.a.): 6.25%
Axis Bank Tax Saving FD
For general citizens (p.a.): 5.75%
For Senior Citizens (p.a.): 6.50%
Bank oF Baroda Tax Saving FD
For general citizens (p.a.): 5.35%
For Senior Citizens (p.a.): 6.00%
IDFC Bank Tax Saving FD
For general citizens (p.a.): 6.25%
For Senior Citizens (p.a.): 6.75%
Union Bank of India Tax Saving FD
For general citizens (p.a.): 5.40%
For Senior Citizens (p.a.): 5.90%
IDBI Bank Tax Saving FD
For general citizens (p.a.): 5.60%
For Senior Citizens (p.a.): 6.35%
Is FD a safe investment option?
It’s a good option for consumers who want to lower their portfolio risk. Despite the fact that fixed deposits are fixed-income products, banks frequently vary the interest rates on FD plans.
