From HDFC To SBI: Best FD Returns Of India's 10 Biggest Banks

Looking to maximise your savings? Explore the best fixed deposit (FD) returns offered by India's biggest banks. In this guide, we'll highlight the top banks offering competitive FD rates in March 2024, helping you make informed decisions to grow your wealth.

Among the top-notch banks in India, certain giants like HDFC and IDFC First Bank stand out for offering some of the most competitive FD rates in the market.

These banks have built a reputation for providing attractive returns on investment, making them a preferred choice for many discerning investors. Discover which banks offer the best FD returns and how you can benefit from these lucrative investment opportunities.

1. HDFC Bank

Tenure - 18 months to < 21 months

Interest Rate (per annum) - 7.25%

2. ICICI Bank

Tenure - 2 years

Interest Rate (per annum) - 7.2%

3. State Bank Of India

Tenure - 2 years to less than 3 years

Interest Rate (per annum) - 7.00 %

4. Kotak Mahindra Bank

Tenure - 390 Days (12 months 25 days) and 391 Days - Less than 23 Months

Interest Rate (per annum) - 7.40%

5. Axis Bank

Tenure - 17 months < 18 months

Interest Rate (per annum) - 7.20%

6. IndusInd Bank

Tenure - 1 Year to below 1 Year 6 Months, 1 Year 6 Months to below 1 Year 7 Months and 1 Year 7 Months up to 2 Years

Interest Rate (per annum) - 7.75%

7. Bank of Baroda

Tenure - Above 2 Years and upto 3 Years

Interest Rate (per annum) - 7.25%

8. Punjab National Bank

Tenure - 400 Days

Interest Rate (per annum) - 7.25%

9. Union Bank of India

Tenure - 399 Days

Interest Rate (per annum) - 7.25

10. IDBI Bank

Tenure - > 2 Years to <3years

Interest Rate (per annum) - 7.00%

(FD rates as of 14th March 2024)

Types of Fixed Deposits

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Many banks in India offer different kinds of FDs. But mainly, there are two types: cumulative and non-cumulative.

Cumulative Deposits: Here, interest keeps adding up during the period, and you get it along with your initial money when the FD ends.

Non-cumulative Deposits: In this type, you get the interest at regular intervals throughout the FD period. The interest rate remains the same in both types.

In non-cumulative deposits, interest is usually given out every three months. If you choose monthly payments, the rate is lower. You can also choose to get interest payments every month, three months, six months, or once a year. For cumulative deposits, interest is added up every three months.

There are various FD schemes offered by banks in India. Let's explore some of them.

Standard Fixed Deposits:

• This is the basic FD offered by all banks.
• You deposit money for a certain time.
• The bank decides the interest rate.
• The duration can be from 7 days to 10 years.
• Interest rates are usually higher than savings accounts.

Tax Saving Fixed Deposits:

• These are meant to help you save on taxes.
• You can save up to Rs. 1.5 lakh per year on taxes.
• They have a lock-in period of 5 years, so you can't withdraw the money during this time.
• Only one-time deposits are allowed.

Special Term Deposits:

• These are like standard FDs but with a twist.
• If you don't take out your money for a specific time, you get more interest than usual.

Fixed Deposits for Regular Income:

• Good for people with limited income who need monthly money from their savings.
• You can choose to get interest every month or every three months.

Fixed Deposit Scheme for Senior Citizens:

• This is for people aged 60 and above.
• They get extra interest, usually around 0.50% more.
• The time periods are flexible.

Flexible Fixed Deposit:

• These FDs are linked to your savings account.
• You start with some money and connect it to your savings.
• Any extra money in your savings account gets moved to the FD automatically.

Corporate and Alternative Fixed Deposits:

• Investors give money to companies or financial institutions for a set time and interest rate.
• Corporate FDs offer a chance for higher returns, but you need to pick the right company.
• It's important to check the company's credit ratings.
• These deposits are risky because if the company fails, you might not get your money back.

Advantages of Bank Fixed Deposits

Guaranteed Returns - No matter what happens with interest rates or the economy, you'll get the same amount of money back when you invest.

Surety at Maturity - When your investment term ends, you'll get back your initial money plus any interest you've earned.

Flexible payment options - You can earn extra interest on the interest you've already earned, which helps your savings grow faster.

Senior Citizens Can Earn More - Older people can make more money from their savings and get closer to having a comfortable retirement.

How to Open an FD Account?

You can open an FD account in two ways: online or offline.

Online: If you already have an account with the bank, it's easy to open an FD online. Just log in to your account, fill out the online form, and submit it. You don't need to provide extra information because the bank already has it. Then, transfer money from your account to start the FD.

Offline: Go to your bank's nearest branch, fill out an application form, and submit it along with the required documents. After depositing your money, you'll get an FD receipt.

Factors that Affect FD Interest Rates

Tenure: Shorter terms have lower rates, while longer or medium terms have higher rates.

Deposit Amount: Larger deposits, especially over Rs.1 crore, earn higher interest rates.

Senior Citizen Benefits: Older people often get extra interest on their fixed deposits.

Tax on FD Interest

• The interest you earn from your FD is considered income and is fully taxed.
• If your yearly interest income is less than Rs.40,000, the bank won't deduct any tax.
• You need to submit Forms 15G or 15H to the bank at the beginning of the fiscal year to avoid tax deduction. After you submit these forms, the bank won't deduct any tax.

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