July 6, 2024

Prosperity Picks: Exploring the Best Fixed Deposit Rates in 2024

Fixed Deposit, which is also termed a Term deposit, is basically an investment option in which a customer puts their idle money for a fixed period and earns a fixed interest rate at regular intervals or at the time of maturity. It is considered a very safe option, especially for a conservative customer; herein, your capital is secure and well-protected. These features make it a great option for realizing short-term goals and post-retirement corpora.

Characteristics of Fixed Deposits from Banks –

  • It is a safer investment tool as compared to other tools.
  • It allows customers to earn good and safe interest after a certain length of time.
  • There is no maximum amount deposit amount
  • Different terms are available, and the maximum term is ten years.
  • Senior citizens are subject to higher return rates.

Advantages of Fixed Deposits from Banks –

  • Guaranteed rate of return – No matter how the market moves, if you invest in a fixed deposit, you will surely get fixed returns on what you invest.
  • Surety at maturity – You will be secure in case of a fixed deposit, as at the time of maturity, you will receive your initial investment amount plus any collected interest. Suppose you maintain an FD with SBI; you will get your initial investment amount along with the interest amount, which can also be calculated with the help of the SBI Interest Rates Calculator.
  • Flexible payment options – A flexible payment option is given to the customer as compound interest rates for faster growth. This allows you to get a large sum at the end.
  • Senior citizens can have better earnings from their life savings and head towards a non-compromised, good, retired life.

Top Banks FD Interest Rates 2023

FD SchemeAll Bank FD Interest Rates 2023
IDBI Bank Tax Saving FD6.10% – 6.85%
PNB Tax Saving FD5.80% – 6.30%
IDFC First Bank Tax Saving FD6.50%
Axis Bank Tax Saving FD6.10% – 6.85%
HDFC Bank Tax Saving FD6.10% – 6.60%
IndusInd Bank Tax Saver Scheme6.75% – 7.50%
SBI Bank Tax Saving FD6.10% – 6.60%
RBL Bank Tax Saving FD6.55% – 7.05%
Canara Bank Tax Saving FD6.50% –
Bank of Baroda Tax Saving FD5.65% – 6.30%
Union Bank of India Tax Saving FD6.70% –
Punjab and Sind Bank Tax Saving FD6.10% – 6.60%

How to Open a Fixed Deposit Account?

  • ONLINE METHOD – It is comparatively easy to open an FD account in a bank in which you already have an account. In this case, you don’t require KYC to be filled as the bank already has your information. Visit the bank’s official website, download the online form, and fill it out properly. You should use internet facilities to transfer the funds into your account.
  • OFFLINE METHOD – In this method, one has to visit the nearest branch of the bank. The bank representative will help you in getting documentation done. After depositing the documents, you will receive an FD receipt.

Factors that affect interest rates of Fixed Deposit

  • Deposit Duration – The shorter the duration, the lower the interest rates; the longer the duration, the higher the interest rates.
  • Deposit Amount – Higher deposits give higher interest rates, especially more than 1 crore deposits will give you higher interest rates.
  • Senior citizens get an advantage of higher interest rates; they receive an additional interest rate of 0.25% to 0.50% on fixed deposits. Let us say you hold an FD in Cosmos Bank, so there you will get an additional percentage of interest in case of senior citizens over and above Cosmos Bank FD Rates for regular citizens.

Tax over the Interest Rates of Fixed Deposit –

  • The interest earned on your Fixed Deposit will be fully taxed and will come under Income from other sources.
  • If the interest income from your fixed deposit is under INR 40000, then the bank will not charge TDS.
  • At the start of the fiscal year, one should file Forms 15G and 15H; after filing the paperwork, the bank will not deduct TDS.

Documents Required To Open Fixed Deposit Account


ParticularsList of Documents Required
Proof of Identity
  • Aadhaar card
  • Government ID card
  • PAN card
  • Voter ID card
  • Driving license
Address proof
  • Passport
  • Photo Ration Card
  • Utility bills
  • Electricity bill
Savings Account Details to Link with FD Account
  • Cancelled cheque
  • Bank Statement

Benefits of Fixed Deposit Interest Rates by Top Banks

  • Better rate of interest on Fixed Deposit – The rate of interest you get on a fixed deposit is better than what you get on a savings account. Interest rates
  • Indian citizens are eligible to open an FD account – Any Indian resident, including minors, NRIs and Hindu Undivided Families (HUF), can open a fixed deposit account.
  • Select a maximum of two nominees. In fixed deposit, you can select two nominees, which means that in case of the death of the account holder concerned, two nominees can collect the amount after giving proof of the death of the cardholder.
    • Partial Withdrawal of the Amount – Premature withdrawal is allowed in fixed deposit after paying minimal charges.
  • Sweep in Facility in Fixed Deposit Account – This provides the customer with a sweep-in facility in which it links the savings bank account with the fixed deposit account. This enables the customer to earn the best fixed deposit return with the option of withdrawal option at any time.
  • Loan Against Fixed Deposit – The bank provides a loan facility against fixed deposits to meet any financial needs. A loan on FD of up to 75% – 90% of your FD amount is provided by Indian banks.
  • Taxation Benefits Earned on Interest Rates on FD – The taxation rule that applies to filing of Income Tax Returns on income earned from Fixed deposits are as mentioned below –


TaxationBenefits on Taxation
Tax on Fixed Deposit Investment
  • Normal FD: Taxable as per Income Tax Slab Rates
  • Tax-Saver FDTax deductions allowed u/ Section 80C of the IT Act, 1961
Tax on Fixed Deposit Interest Applicable for 10% TDS deduction on FD interest if:

  • For Senior Citizens: Annual Fixed Deposit interest is more than INR 50,000
  • For General Citizens: Annual Fixed Deposit interest is more than INR 40,000

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