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Fixed Deposit in 2022

Fixed Deposit Account & Other Details

Last Updated 01st Jul 2022

  • Fixed Deposits, also known as term deposits are fixed income instruments where the depositor saves money for a fixed time at a fixed rate.
  • Fixed Deposits are provided by Banks, NBFCs and Corporations at comparative factors.
  • FDs are popular as they offer higher interest rates compared to savings deposits.
  • Fixed deposit provides additional returns to senior citizens.Jana Small Finance Bank is the best bank for FD that offers returns upto 7.05%.
Rate of Interest 1.75% to 7.05%
Interest payment Monthly, Quarterly or Annually
Tenure 7 Days to 10 Years
Deposit Amount ₹ 100 or No limit
    Earn upto 7.05% on FD APPLY NOW

    Compare Best Bank & NBFCs for FD

    Bank FD Tenure Interest Rates
    SBI Fixed Deposit 7 Days - 10 Years 2.90% - 5.50%
    HDFC Bank FD 7 Days - 10 Years 2.75% - 5.75%
    ICICI Bank FD 7 Days - 10 Years 2.75% - 5.75%
    Axis Bank FD 7 Days - 10 Years 2.50% - 5.75%
    ICICI Home Finance 12 Months - 120 Months 5.25% - 6.95%
    Kotak Bank 7 Days - 10 Years 2.50% - 5.90%
    PNB Housing Finance 12 Months - 84 Months 6.00% - 7.25%
    IDFC First Bank 7 Days - 10 Years 3.85% - 6.05%
    Bank of Baroda 7 Days - 10 Years 2.80% - 5.50%
    Citibank 7 Days - 1825 Days 2.40% - 3.50%

    What is Fixed Deposit?

    Fixed Deposits also known as ‘term deposits’ or ‘time deposits’ is a low-risk financial instrument that is offered by banks, post offices or Non-Banking Financial Companies (NBFCs). The duration of a fixed deposit may vary from 7 days to 10 years, wherein you can invest your funds for a fixed period and earn returns. The returns earned on FD varies across all fixed deposit providers, and currently ranges between 1.75% to 7.35%.As per the current rates, Jana Small Finance Bank is the best bank for fixed deposits that offer returns upto 7.05%.

    Types of Fixed Deposit

    You can invest your money as per your convenience and investment needs in different fixed deposit types. However it is important to understand fixed deposit meaning before investing in any FD.

    • 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 ₹ 1.50 Lakh in a financial year on these deposits. Unlike regular fixed deposits, investment in these FDs is made as a lump-sum payment.
    • Senior Citizens Fixed Deposit: If you are above the age of 60, you can invest in senior citizens fixed deposits. The rate of interest on FD for senior citizens deposits is higher than a regular fixed deposit.
    • Flexi Fixed Deposit: It is a special kind of fixed deposit 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.Know More

    Who is Eligible to Open a Fixed Deposit Online Account?

    The basic eligibility criteria across all FD providers are listed as follows:

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

    List of Documents Required for Fixed Deposit

    To open a fixed deposit online or offline, you must satisfy RBI mandated KYC guidelines, including submission of fixed deposit documents such as identity, age and address proofs.

    • Identity Proof: Aadhaar Card, Passport, PAN card, Voter ID card, Driving licence, Government ID card, Photo ration card
    • Address Proof: Aadhaar, Passport, Telephone bill, Electricity bill, Bank Statement with Cheque
    • Signature Proof: Passport, PAN card, Driving License

    Features and Benefits of Fixed Deposits Scheme

    A fixed deposit is a risk-free investment instrument that offers assured fd returns at the end of the maturity period. Here are some other fixed deposit benefits:

    • Flexible tenure : A fixed deposit offers a tenure ranging from 7 days to 10 years. You can thus choose short term, medium term or long tenure for investment depending upon your reason to invest.
    • Tax Benefits : Under Section 80 C of the Income Tax Act, you can get tax exemption upto ₹ 1.50 Lakh on your FD investment.
    • Liquidity : One of the advantages of a fixed deposit is that it is easily convertible to cash. However, banks may charge a penalty for premature withdrawal.
    • Assured Returns : Fixed Deposits offer fixed returns on the investments as they are not tied to market conditions. Though the interest rate may change over time for new investors, it won't impact the rate you invested in.Thus, you can get assured FD returns on your investments for a fixed time period.
    • Loan against FD : In times of financial needs, you can also avail loan against fixed deposits for upto 90% of the deposit amount at 1-2% above the fixed deposit rate.

    Nomination facility on Fixed Deposits

    Nomination facility is available for all FD account holders to add a nominee whom you want to transfer the FD amount in the event of your death .The fixed deposit nominee rights can be made in favour of a single person only in existing or new accounts.

    • All deposit accepting banks, NBFCs, HFC’s and corporates offer nomination facility.
    • Nominee is a person who claims the deposit upon the 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 relationship with the bank.

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

    Premature Withdrawal on Fixed Deposit

    At times, you may need urgent funds and may want to withdraw your fixed deposits before maturity. In common language this is known as breaking a FD. Banks usually levy a penalty for fixed deposit withdrawal before maturity either by paying a 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.

    What is the Revised TDS Rate 2022 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 is subject to 10% tax deduction at source (TDS). From 14th May 2020 onwards till March 2021, the TDS rate was revised and cut down to 7.5% 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.

    Fixed Deposit Receipt

    A fixed deposit receipt or FDR is a document handed over to you by the bank or the financial institution when you book 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 your name, 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 safe and secure because it is required at the time of FD renewal, premature withdrawals and also if one needs loans against Fixed Deposits.

    Compare Bank FD, NBFC FD and Corporate FD

    Bank FDs are common fixed deposits where most of us invest our money. However, the rate of interest for bank fixed deposits may have fallen over the years. You can thus compare bank FD with other types of FD such as NBFC FD and Corporate Fixed deposits to invest in the best bank for FD.

    Bank FD NBFC 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 DICGC Yes, up to ₹ 5,00,000 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

    What is Fixed Deposit Insurance?

    Bank FDs are completely safe as retail deposits of up to ₹ 5 Lakh are covered by a guarantee by the government through DICGC. Full form of DICGC is Deposit Insurance and Credit Guarantee Corporation.

    It is important to understand that 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.

    FAQs

    Which bank is best for FD 2022?

    As per the current rates, Jana Small Finance Bank offers highest returns upto 7.35% and is the best FD for bank fixed deposits.

    What is the minimum amount for FD in SBI?

    The minimum amount for FD investment in SBI is ₹ 1,000. There is however no limit on the maximum amount of investment.

    What is the minimum amount for fixed deposit?

    The fixed deposit minimum amount for investment may vary from bank to bank. However, in general you have to invest an amount of Rs. 100 in FD.

    What are the minimum and maximum duration for fixed deposits?

    The fixed deposit maximum period and minimum period varies from bank to bank depending on the type of investor. However, the fixed deposit time period ranges between 1 day to 20 years.

    What happens if you break FD before maturity?

    Breaking an FD before the maturity period can cost you a loss on the interest that you can otherwise earn on your FDs. Further, you may have to pay the penalty for the same, that may be up to 1%.

    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%. Some banks may however lower the interest rate instead of charging separate penalties.

    Can I withdraw FD online?

    Yes, you can withdraw FD amount online before FD maturity but banks may levy a penalty by paying lower interest rate or charging a penalty for premature withdrawal.

    What is the difference between RD or FD?

    Recurring Deposit (RD) lets you deposit a certain amount each month in the account to earn interest on the invested sum for a specified tenure on a predetermined rate of interest. Whereas, Fixed Deposit meaning FD or term deposits is created by investing a lump sum amount for a specified tenure on a predetermined rate of interest.

    Can I opt for an auto-renewal facility while opening a FD?

    Yes, you can opt for the auto-renewal facility while opening an FD. It can be opted when investing in Fixed deposit or amidst the FD tenure. When the FD matures, the bank will auto-renew it at the applicable rate of interest.

    Can I renew my FD account after its maturity?

    Yes, you may renew the bank deposit after its maturity by contacting the branch. In addition, customers 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 the renewal of FDs will be as per the prevailing rate at the time of FD maturity.

    Why should you invest in Fixed Deposit?

    You must invest in a fixed deposit to earn fixed and assured returns on your deposits for a short, medium or long term. As per the current rates, Jana Small Finance Bank provides highest return on your fixed deposit upto 7.35%.

    Can we change the nominee in fixed deposit?

    Yes, you change the nominee in fixed deposit anytime during the investment tenure through various modes. These modes include mobile banking, internet banking or visiting the bank branch.


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    Our News - Jul 2022
    • 2022-06-14 : Ujjivan Small Finance Bank Hikes Fixed Deposit Interest Rates
      Ujjivan Small Finance Bank has increased fixed deposit interest rates on its Platina Fixed Deposit Special term deposit plan. You can invest in the deposits for tenure ranging from 12 months to 60 months for upto Rs.2 crores.
    • 2022-06-02 : IndusInd Bank Revises Fixed Deposit Rates
      The bank has changed the interest rates on fixed deposits for deposits less than Rs. 2 Crore to a maximum of 6.50 percent for non-senior citizens and 7% for senior citizens.
    • 2022-05-12 : Axis Bank Hikes Fixed Deposit Rates
      The private lender now pays interest rates of 2.5 percent to 5.75 percent across various FD tenors.
    • 2022-04-29 : ICICI Bank Changes Fixed Deposit Interest Rates
      The private sector bank has increased the rates by 5 basis points and, thus, on tenure 1 year to 389 days. It offers a 4.35% interest rate, and it is offering a 4.35% rate from 4.30% earlier on 390 days to less than 15 months.
    • 2022-04-28 : Airtel Payments Bank and IndusInd Bank to Offer FDs
      Airtel Payments Bank has tied up with IndusInd Bank to offer fixed deposits starting from ₹500 up to ₹1.9 lakh for its customers. The payment bank customers can open FDs digitally on the Airtel Thanks mobile application.
    *Terms and conditions apply. Credit at sole discretion of lender, which is subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and collected from public sources. Read More
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