MyLoanCare is a FREE of cost service for borrowers

MyLoanCare - Baat Aapke Interest Ki

MyLoanCare Customer Ratings - 4.5/5.0

Menu

Fixed Deposit

Fixed Deposit in India

Last Updated 01st Dec 2020

Fixed Deposits also known as Term Deposits or Fixed Deposit Receipt (FDR), is a fixed income instrument where the depositor saves money for a fixed time at a fixed rate. FDs are popular as they offer higher interest rate compared to savings deposits and are safe.

Rate of Interest 2.25% to 6.95%
Interest payment Monthly, Quarterly or Annually
Tenure 7 Days to 10 Years
Deposit Amount ₹ 100 or No limit
Top Providers Banks, NBFCs and Small Finance Banks
Deposit Insurance Available under DICGC for Banks. Not applicable to NBFC FDs.
Popular FD Schemes Regular FD, Sweep-in FDs, Senior Citizens Fixed Deposits and Tax Saving Schemes
    Earn upto 6.95% on FD APPLY NOW

    Top Bank Fixed Deposit Schemes in India

    Bank FD Tenure Interest Rates
    SBI Fixed Deposit 7 Days - 10 Years 2.90% - 5.40% Explore More Calculator
    HDFC Bank Fixed Deposit 7 Days - 10 Years 2.50% - 5.50% Explore More Calculator
    ICICI Bank Fixed Deposit 7 Days - 10 Years 2.50% - 5.50% Explore More Calculator
    Axis Bank 7 Days - 10 Years 2.50% - 5.50% Explore More Calculator
    ICICI Home Finance 12 Months - 120 Months 6.00% - 6.50% Explore More Calculator
    Kotak Bank 7 Days - 10 Years 2.50% - 4.90% Explore More Calculator
    PNB Housing Finance 12 Months - 120 Months 5.90% - 6.70% Explore More Calculator
    IDFC First Bank 7 Days - 10 Years 2.75% - 6.00% Explore More Calculator
    Bank of Baroda 7 Days - 10 Years 2.80% - 5.25% Explore More Calculator
    Citibank 7 Days - 1825 Days 2.75% - 3.75% Explore More Calculator
    IDBI Bank 7 Days - 20 Years 2.90% - 5.10% Explore More Calculator
    Indian Bank 7 Days - 10 Years 2.90% - 5.15% Explore More Calculator
    Indian Overseas Bank 7 Days - 10 Years 3.40% - 5.25% Explore More Calculator
    OBC 7 Days - 10 Years 3.00% - 5.25% Explore More Calculator
    PNB 7 Days - 10 Years 3.00% - 5.25% Explore More Calculator
    HDFC 33 Months - 66 Months 5.85% - 6.25% Explore More Calculator
    Allahabad Bank 7 Days - 10 Years 2.90% - 5.15% Explore More Calculator
    Andhra Bank 7 Days - 10 Years 3.00% - 5.40% Explore More Calculator
    Bank of India 7 Days - 10 Years 3.25% - 5.30% Explore More Calculator
    Bank of Maharashtra 7 Days - 10 Years 3.00% - 4.90% Explore More Calculator
    Canara Bank 7 Days - 10 Years 2.95% - 5.50% Explore More Calculator
    Central Bank of India 7 Days - 10 Years 2.75% - 5.00% Explore More Calculator
    Punjab and Sind Bank 7 Days - 10 Years 3.25% - 5.30% Explore More Calculator
    UCO Bank 7 Days - 10 Years 2.75% - 4.85% Explore More Calculator
    Union Bank of India 7 Days - 10 Years 3.00% - 5.40% Explore More Calculator
    United Bank of India 7 Days - 10 Years 3.00% - 5.25% Explore More Calculator
    IndusInd Bank 7 Days - 10 Years 3.25% - 7.00% Explore More Calculator
    Karur Vysya Bank 7 Days - 10 Years 3.50% - 5.65% Explore More Calculator
    RBL Bank 7 Days - 20 Years 3.25% - 6.95% Explore More Calculator
    Yes Bank 7 Days - 10 Years 3.50% - 7.00% Explore More Calculator
    HSBC Bank 7 Days - 60 Months 2.25% - 4.00% Explore More Calculator
    Standard Chartered Bank 7 Days - 5 Years 2.50% - 5.60% Explore More Calculator
    LIC Housing Finance 18 Months - 5 Years 5.50% - 5.60% Explore More Calculator
    Corporation Bank 7 Days - 10 Years 3.00% - 5.40% Explore More Calculator
    Syndicate Bank 7 Days - 10 Years 2.95% - 5.30% Explore More Calculator
    DCB Bank 7 Days - 120 Months 4.75% - 6.95% Explore More Calculator
    Dhan Laxmi Bank 7 Days - 10 Years 3.50% - 5.60% Explore More Calculator
    Karnataka Bank 7 Days - 10 Years 3.50% - 5.70% Explore More Calculator
    South Indian Bank 7 Days - 10 Years 3.50% - 5.50% Explore More Calculator
    Federal Bank 7 Days - 4 Years 2.50% - 5.50% Explore More Calculator
    Jammu And Kashmir Bank 7 Days - 10 Years 3.00% - 5.30% Explore More Calculator
    Lakshmi Vilas Bank 7 Days - 10 Years 3.60% - 7.00% Explore More Calculator
    Bajaj Finance 12 Months - 60 Months 6.10% - 6.60% Explore More Calculator
    DBS Bank 91 Days - 10 Years 2.50% - 5.50% Explore More Calculator
    Bandhan Bank 7 Days - 10 Years 3.00% - 6.00% Explore More Calculator
    AU Small Finance Bank 7 Days - 120 Months 3.75% - 6.75% Explore More Calculator
    Ujjivan Small Finance Bank 7 Days - 10 Years 3.05% - 6.50% Explore More Calculator
    Equitas Small Finance Bank 7 Days - 10 Years 3.60% - 7.00% Explore More Calculator
    Fincare Small Finance Bank 7 Days - 84 Months 3.00% - 6.50% Explore More Calculator
    Jana Small Finance Bank 7 Days - 10 Years 3.00% - 7.50% Explore More Calculator
    ESAF Small Finance Bank 7 Days - 3653 Days 4.50% - 6.50% Explore More Calculator
    India Post Office 7 Days - 5 Years 5.50% - 6.70% Explore More Calculator

    Fixed Deposit Account

    Fixed Deposits are also known as ‘term deposits’ or ‘time deposits’. Term deposits are considered safest investment option compared to other savings instruments. duration of a fixed deposit may vary from 7 days to 10 years. Key Features are:

    • Definition: Fixed Income Instrument in which depositor saves money with a bank or non-bank in return of a fixed interest rate over a defined tenure.
    • Safety: Deposits up to ₹ 5,00,000 with banks are covered under deposits insurance. However, deposit insurance under DICGC is not available for NBFC deposits and the safety of their deposits are to be evaluated based on their ratings.
    • Rates: As per today’s rate, interest rates on FDs can range between 2.25% to 7.50%.
    • Tenure: Option to choose a FD from 7 Days to 10 Years.
    • FD Renewal: Available as per bank’s discretion and at the rates as applicable at the time of renewal.
    • Loan against FD: Available from the same bank with which you have a FD at 0.75-1% higher rate on FD to help a customer with funds without the need to break the FD.
    • Breaking of FD: Available but with penalty charges in the form of lower interest rate or direct penalties linked to FD amount.
    • Popular FD Schemes: Senior Citizens FD Scheme, Tax Saving Fixed Deposits, FDs of Small Finance Banks along with Regular FD schemes.

    Who is eligible to open a Fixed Deposit online account?

    Any individual above the age of 18 years and with a separate PAN Card is eligible to open a FD Account by submitting basic KYC Documents. Minors can open an online FD account with a guardian.

    • Individual depositors above 18 years of age and having a PAN.
    • Hindu Undivided Family (H.U.F) with a separate PAN.
    • Minors (those below 18 years of age) under guardianship of a guardian more than 18 years old.

    All depositors must satisfy RBI mandated KYC guidelines which include identity proof, age proof and address proof, among others.

    Can I renew my FD account after its maturity?

    On maturity, the customer may renew the bank deposit by contacting the branch. Customer can also place an auto renewal request with the bank for either the maturity amount or only the principal component (in which case the interest, subject to TDS, will get credited to the depositor’s bank account). However, the rate of interest on renewal of FDs will be as per the prevailing rate at the time of FD maturity.

    Is Nomination facility available on Fixed Deposits?

    Nomination facility is available for all FD account holders to add nominee to whom they want to transfer the amount in the event of their death. Nomination can be made in favour of single person only. A depositor can add nominee in existing or new accounts.

    • All deposit accepting banks, NBFC’s, HFC’s and corporates offers nomination facility.
    • Nominee is a person who claims the deposit upon depositor’s death.
    • Without a nominee, money in Fixed Deposit account will not be automatically transferred to the account-holder’s next of legal heirs and the claimants will need to establish their bonafide with the bank.

    Nominations can be changed or cancelled by the FD account holder.

    Is Premature Withdrawal allowed on Fixed Deposit?

    Very often depositors face a situation where they need urgent funds and may want to withdraw their fixed deposits before maturity. In common language this is knows as breaking a FD. Banks usually levy a penalty at the time of premature withdrawal of FD either by paying lower interest rate on the deposit amount or deducting a penalty amount from the FD.

    However, some banks including Yes Bank and Bank of Maharashtra waive off interest penalty on FD if the liquidation is due to some emergency. Some banks also offer the option of partial withdrawal from the fixed deposit account with some penalty.

    A fixed deposit receipt or FDR is a document handed over to the depositor by the bank or the financial institution when one books an FD with them. The receipt is proof and similar to how a bill is handed over at the end of a purchase. It contains information like name of the depositor, his or her age, principal amount, deposit tenure, date of booking the fixed deposit, maturity date, the interest rate and the terms and conditions on the FD. The FDR must be kept safely and securely by the depositor because it is required at the time of FD renewal, premature withdrawals and also if one needs loans against Fixed Deposits.

    Is FD Taxable?

    FD is a taxable instrument. However, there are specific inclusions where one can save tax on FD by opting for a tax saving FD.

    Tax Exemption on Principal Amount

    Tax exemption on principal amount or amount deposited as FD is available if the investment has been made in a tax saving FD.

    Income tax on interest on fixed deposit

    Interest on FD is taxed at applicable tax rate to the depositor. Interest on FD’s is taxable on accrual basis which means that even if the depositor will get FD maturity amount and interest at the time of FD maturity, he will pay tax on accrued interest on FD every year.

    What is the revised TDS Rate 2020 for FDs?

    In case the interest earned by you on fixed deposits with all branches of a bank in a year exceeds ₹ 40,000, your interest income was subject to 10% tax deduction at source (TDS). However, from 14th May 2020 onwards till March 2021, TDS rate has been revised and cut down to 7.5% with a view to provide relief to depositors in the current COVID’19 pandemic. Remember to quote your IT PAN when opening the term deposit, otherwise the bank will deduct TDS at twice the applicable rate. Also, you can claim credit for TDS exemption on FD only if your PAN is recorded with the bank.

    Can I get a Loan against Fixed Deposit?

    Banks offer facility of loan against FD to help depositors tide over temporary shortfalls in funds without the need of breaking their FDs and taking a loss in the form of lower interest or paying a penalty. Here are the features of Loan against FD:

    • Loan against FD can be availed only from the same bank at which the deposit is placed.
    • Most banks allow loans upto 90% of the value of the fixed deposit.
    • Tenure for loan has to be within the balance maturity of the deposit.
    • The interest rate on a loan against Fixed Deposit is usually 0.5% – 2% above the interest rate on the deposit. Loans against bank’s own deposits are exempt from base rate and hence can be offered below the bank’s base rate also.
    • Loan against Fixed Deposit can typically be availed even if the applicant has a poor credit history or CIBIL record and a low CIBIL score. Regular repayment of loan against FD may also help improve one’s CIBIL score.

    FDR

    A fixed deposit receipt or FDR is a document handed over to the depositor by the bank or the financial institution when one books an FD with them. The receipt is proof and similar to how a bill is handed over at the end of a purchase. It contains information like name of the depositor, his or her age, principal amount, deposit tenure, date of booking the fixed deposit, maturity date, the interest rate and the terms and conditions on the FD. The FDR must be kept safely and securely by the depositor because it is required at the time of FD renewal, premature withdrawals and also if one needs loans against Fixed Deposits.

    How do bank FD’s compare with NBFC FDs and Corporate FDs?

    Bank FDs vs. NBFC FDs vs. Corporate FDs

    Bank FD NBFC FD, HFC FD Corporate FD
    Safety Highest Typically lower than banks Typically lower than banks
    Credit rating Not required Mandatory Mandatory
    Interest Rates Depends on the scale of banks. Lower for large banks but higher for small finance banks Higher than banks. Higher the credit rating, lower the rates and vice versa Higher than banks. Higher the credit rating, lower the rates and vice versa
    FD Tenure Few days to 10 years 1 year to 5 years 1 year to 5 years
    Maturity Options Non cumulative and cumulative Non cumulative and cumulative Non cumulative and cumulative
    Coverage under DCGCI Yes, up to ₹ 5,00,000 lakh of deposits in all bank accounts No No
    Security None None None
    Loan against FD Available at 0.5 – 1.0% over FD rate May be available Not available
    Flexi/ Sweep facility Offered by many banks Not available Not available
    Frequency of interest compounding Quarterly May vary May vary
    Tax deduction at Source (TDS) On interest income of more than ₹ 10,000/ - for a PAN in one bank across branches On interest income of more than ₹ 5,000/ - for a PAN On interest income of more than ₹ 5,000/ - for a PAN
    Tax Benefit on FD Available on principal amount for 5 year tax saving deposits under Section 80-C None None
    Nomination Facility Available Available Available
    Employee FD’s > Available; slightly higher interest (upto 0.5%) may be offered Available; slightly higher interest (upto 0.5%) may be offered Available; slightly higher interest (upto 0.5%) may be offered
    Special schemes for senior citizens 0.25% to 1.0% higher interest rates 0.25% to 1.0% higher interest rates 0.25% to 1.0% higher interest rates
    Shareholder FD’s No extra benefit Slightly higher interest may be offered in some cases Slightly higher interest may be offered in some cases

    Type of Fixed Deposit

    There are some different types of fixed deposits where you can invest your money as per your convenience and investment needs.

    • Regular Fixed Deposit: In a regular fixed deposit, you can invest your funds ranging from 7 days to 10 years for a fixed period. These deposits are taxable as per your tax slab rate. You can choose cumulative or non-cumulative fixed deposits as per your requirements. In a cumulative FD, interest is paid at the time of maturity, and you can choose to withdraw interest on a monthly, quarterly or half-yearly basis in a non-cumulative fixed deposit.
    • Tax-saving Fixed Deposit: Tax-saving deposits are invested for a lock-in period of 5 years. Under Sec 80 C, you can earn tax deductions up to Rs. 1.5 Lakhs in a financial year on these deposits. Unlike regular fixed deposits, investment in these FD is made as a lump-sum payment.
    • Senior Citizens Fixed Deposit: Individuals above the age of 60 can invest in senior citizens fixed deposit. The rate of interest on these deposits is higher than a regular fixed deposit.
    • Flexi Fixed Deposit: It is a special kind of fixed deposits which combines the features of savings or current account and fixed deposits. Using the auto- sweep facility, the excess funds automatically get transferred from the savings account to fixed deposits.

    What is Deposit Insurance?

    Bank FDs are completely safe as retail deposits of up to Rs 5 lakh are covered by a guarantee by government through DICGC. Full form of DICGC is Deposit Insurance and Credit Guarantee Corporation which provides a guarantee known as DICGC guarantee on deposits of up to 5 lakh. The insurance limit on FDs have been increased in the latest Budget 2020 and is expected to reduce the risk of small depositors.

    It is important to understand the deposit insurance is available for banks and Small Finance Banks. However, deposit insurance is not applicable to NBFCs and HFCs. In the case of NBFCs and HFCs, it is advisable to invest in AAA rated or highly rated FDs only to reduce the risk on your savings.

    Who can issue a fixed deposit?

    A fixed deposit may be issued by any of the following entities:

    • Scheduled banks operating in India including public sector banks, private banks and foreign bank branches operating in India
    • Small Finance Banks
    • Deposit taking NBFC’s permitted by the RBI to accept deposits
    • Housing Finance Companies regulated by the National Housing Bank
    • Public Sector Companies and Undertaking
    • Private Sector Companies
    • Cooperative banks

    FAQs

    What does fixed deposit mean?

    A fixed deposit is an investment or a savings options provided by financial institutions like Banks; wherein one can deposit their funds for a fixed period of time and thereby can earn a return on it in the form of pre-decided interests.

    How does fixed deposit account work?

    A fixed deposit works for the benefit of both the FD provider and holder. While the FD depositor deposits his or her funds in the bank, he or she earns interest on it provided the funds are deposited for a fixed period and not withdrawn before the fixed time. While investing in an FD, the investor has the option to choose the FD tenure as per his or her convenience. The tenure ranges from seven days to up to 10 years. Each of these tenures has a pre-decide interest rate that will be provided on with the funds deposited.

    Can I withdraw money from a fixed deposit?

    Though fixed deposits are investments made for a fixed tenure, yet you can withdraw funds from it under special circumstances. Withdrawing funds prematurely will however lower the return you could otherwise earn on an FD, due to a reduction in interest rate.

    What happens if you break FD before maturity?

    Breaking an FD before the maturity period can cost the FD depositor a loss on the interest that he or she could otherwise earn on their FDs. Further, breaking FD prematurely can also lead one to pay the penalty for the same.

    What is the penalty for breaking a fixed deposit?

    The penalty for breaking a fixed deposit may vary across various banks. However, it usually ranges between 0.5% to 1%.


    Our News - Dec 2020
    • 2020-11-26 : Credit growth slows to 5.8% in the September quarter
      RBI reported that the credit growth which includes retail loans like home, personal, gold, two-wheeler and car loan along with business and mudra loan decelerated to 5.8% in the September quarter from 8.9% in the year-ago period. Further, deposits which include FD and RD increased by11% year-on-year in the July-September period as compared to 10.1% growth a year ago. The share of current account and saving account (CASA) in total deposits stood at 42.3% in September 2020 compared to 41.2% a year ago.
    • 2020-11-11 : SBI to focus on financial inclusion
      SBI is planning to increase the share of its newly created business vertical, financial inclusion and micro-markets from the current 12% to 20% by March 2022. The bank recently created a separate FI&MM vertical within the bank with an aim of financial inclusion of rural and semi-urban areas to improve customer experience in the hinterland.
    • 2020-11-10 : Ujjivan Small Finance Bank reported a marginal rise in Q2 net profit
      Ujjivan Small Finance Bank posted a marginal rise in net profit at Rs 96 crore for September. Total income during July-September 2020-21 increased to Rs 818.01 crore on the back of retail loans like home, personal, gold, two-wheeler and car loan along with business and mudra loans. Further, The bank opened 5.1 lakh deposit accounts between April and September while retail deposits have now grown to 49% of total deposits as against 42% a year back. Deposits which includes fixed and recurring deposits stood at Rs 10,743 crore.
    • 2020-11-06 : New FD rates for Kotak Bank
      Kotak Bank changed its FD rates. The FD rates for 7 to 30 days is 2.50% and 31 to 90 days it is 2.75%. The fixed deposit rate for short tenor for 91 to 179 days it is 3.50% and it is 4.50% for 180 to 364 days. Fixed deposit rate for long tenors of 12 months to 389 days is 4.60%, for 369 days to less than four years is 4.90% and for four years one day to less than 5 years is 4.75%. The revised rates are in effect from 4 November 2020.
    • 2020-11-05 : SBI net profit rises to ₹4,574 crores in Q2
      SBI September quarter net profit jumped 52% year-on-year to Rs 4,574.16 crore as the provisions declined during the quarter. Credit growth for the bank logged an improvement of 6.02% over the previous year driven by home, personal, car, two-wheeler and gold loan along with mudra and business loan. Total advances at the end of Q2 were at Rs 23.83 trillion. Further, total Deposits which includes fixed and recurring deposits grew at 14.4% on a yearly basis to Rs 34.70 trillion, out of which current account deposit grew by 8.55% YoY while saving bank deposits grew by 16.28 per cent YoY.
    *Terms and conditions apply. Credit at sole discretion of lender subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and from collected from public sources. Read More
    Loader
    Please wait while your information is being processed...