Fixed Deposit Interest Rate: Check FD Rates Online

Every responsible individual wants to stabilize their finances. A fixed deposit is one of the best ways to secure our earnings. Fixed deposits (FD) aid in saving money and gaining substantial interest in it. Banks offer competitive fixed deposit interest rates. Choosing the right one will aid depositors in achieving the best returns on their investments for a fixed term. 

List of FD rates in India

The article will help you provide fixed deposit interest rates for the financial firms of different sectors.

For Leading Foreign Banks

For Private Sector Banks

For Public Sector Banks

What is a Fixed Deposit?

Fixed deposit, time deposit or term deposit refers to the investment option that permits investors to deposit money for a specific term and get a fixed interest at regular intervals on their chosen term. Fixed deposit grants capital protection and income certainty, thus becoming a popular choice among young investors. Fixed deposit is an important financial tool that is best fit for short-term financial goals along with saving for emergencies and post-retirement corpora.

How do Fixed Deposit Interest Rates Work?

Fixed deposit interest rates vary with banks and financial firms. Small finance banks, private sector and public sector banks offer distinct interest rates on fixed deposits. In general, the fixed deposit interest rate ranges from 2.50% to 9% per annum for a term of 7 days to 10 years for a regular depositor. In addition, senior citizens get an additional interest rate of 0.50% to 0.70% per annum. 

Factors Affecting Fixed Deposit Interest Rates

Here are some factors that affect fixed deposit interest rates.

1. Deposit Amount: Banks offer higher interest on depositing the bulk amounts lower than INR 1 crore. In contrast, banks provide lower interest rates exceeding INR 1 crore. 
2. Deposit Tenure: Lower interest is offered for shorter-term fixed deposits when compared to the longer term.
3. Type of Depositor: All banks offer competitive higher interest rates for senior citizen fixed deposits.

Salient Features of Fixed Deposit Interest Rates

The list below will help you know the special features of fixed deposit interest rates.

1. Unlike savings accounts, fixed deposits generally offer high-interest rates.
2. Any Indian resident can have a fixed deposit account, including Hindu United Families (HUFs) and minors.
3. Applicants can register two nominees who are permitted to collect the funds after the applicant’s demise after showing a valid death certificate.
4. Premature withdrawal is not permitted in fixed deposits. It means individuals cannot withdraw funds before maturity. In contrast, in case of emergencies, funds can be withdrawn with some penalties.
5. A sweep-in facility is offered to link savings accounts with fixed deposit accounts. It helps auto-transfer of surplus amounts from savings accounts to fixed deposit accounts and earns FD interest rates. 
6. While linking savings and FD accounts, individuals are offered the option of breaking FD at a certain point to utilise money.
7. In case of financial emergencies, FD account holders can avail of loans against fixed deposits. Here, FD works as collateral. Account holders can avail loans up to 75% to 95% of the fixed deposit amount, relying on the bank’s interest rates, which vary from 1% to 1.5% higher than the fixed deposit interest rate.

Fixed Deposit Interest Rates for Senior Citizens

All the banks offer higher fixed deposit interest rates for senior citizens. But to avail of the benefits, the fixed deposit account holder must submit their age proof. The deposited amount is transferred between the savings account and the fixed deposit account, which permits depositor to earn higher interest rates on the surplus amount in their savings account. This scheme is popularly called a sweep-in-sweep-out fixed deposit. 

Here are some features of the fixed deposit interest rates for senior citizens that you must be aware of.

1. Fixed deposit account holder age must be 60 or above at the time of opening the account.
2. Fixed deposit tenure ranges from 1 year to 10 years for the senior citizens in most of the banks.
3. A slightly higher interest rate, ranging from 0.25% to 0.75%, is offered to senior citizens when compared to regular interest.
4. Loans can be taken against senior citizen fixed deposit accounts.
5. Premature withdrawal can be granted with a penalty, like regular fixed deposit schemes.

Note: There are many sectors, such as small finance banks, tax-saving fixed deposits, and corporate fixed deposits, that also offer variable fixed deposit interest rates.

Calculation of Fixed Deposit Interest Rate

While investing, we all want to know about the amount of interest we will earn on a fixed deposit upon maturity. There are FD calculators available online for free to calculate the interest earned at the end of the term. However, we can also calculate the interest amount manually using the following formula:

A=P(1+rn)nt

Where

I=A-P

In the given equations, 

I is the interest earned on fixed deposit

A is the maturity amount, 

P is the principal amount,

t is tenure, and

r is the rate of interest on a fixed deposit.

Taxation on Fixed Deposit Interest Rate

There are some terms of taxation you must learn about.

1. Income earned from the fixed deposit is taken as income from other sources. Thus, they are considered to be taxable.
2. The bank does not reduce tax deducted as Source (TDS) if the interest earned from FD is lower than INR 40,000 per annum.
3. Forms 15G and 15H are to be submitted in the early financial years. Banks do not reduce TDS after these forms are submitted.

Conclusion

FD plays a vital role in setting financial goals. It is important to consider fixed deposit interest rates of multiple sector banks and open accounts where they are paying higher interest. It helps in getting potential earnings over interest at regular intervals. Consider reading the terms and conditions thoroughly to avail yourself of additional benefits to enhance your earnings and to avoid getting stuck in schemes that do not suit you.