The highest interest rate is offered by Fincare Small Finance Bank (for 3 years) at 9.00% and Equitas Small Finance Bank (for 3 years) at 8.80% followed by Suryoday Small Finance Bank (for 3 years) at 8.75%.Disclaimer: The Fixed Deposit Interest Rates keep on changing. You are advised to check the interest rates with banks before making your FD. Source: Bank Websites
FD Account is a safer investment alternative. It is quick, easy to operate and can be opened with minimal documents. In an FD Account, you deposit a certain amount for a fixed period. The FD tenure starts from 7 days and goes up to 10 years. Banks offer higher interest rates on fixed deposits and fixed for whole tenure once FD account gets opened.
You can opt for interest payout option wherein the interest on your deposited amount is paid out to you on a monthly, quarterly or yearly basis. There is once more option called "Cumulative Option" wherein the interest earned by you is not paid midway but it is paid at the end of the tenure along with the principal invested by you.
Fixed Deposit Snapshot
- Maximum Investment Amount: No such limit
- Interest Rates Variable: From 7 to 9% based on term
- Interest earned is taxable: Yes
- Lock in Period: No
- Tenure: 3 Years
- Maturity Value: Taxable
- Premature Withdrawals: Entire amount, anytime but after charging a certain penalty
- Risk: Risky as compared to PPF
How to Choose Right Fixed Deposit (FD)?
Bank FD is a suitable option for ultra-conservative investors who want to opt for an investment avenue which offer them fixed and assured return with high safety. So for such investors, it is equivalent important to know as to How to Choose Right Fixed Deposit (FD)? Outlined steps will help them choosing right fixed deposit (FD):
- Estimate on funds that you can park with bank FD conveniently
- Choose the tenure of FD carefully. While doing so, you should analyse as to for how long you do not require invested fund, this will help you choosing the tenure comfortably
- Compare FD Interest Rates of different banks
- Check whether bank offers you online facility of FD opening
- See whether the customer service of the bank is good
- Based on above mentioned points, choose right FD for you
- Interest earned on FD is taxable as per your tax slab except for 5-year tax saver FDs. Therefore, if you want the interest income to be tax-free, you can go for 5-year tax saver FD.
- Submit Form 15G/ 15H while opening your FD account, in case your income is not taxable in order to avoid deduction of TDS from FD interest income (in case interest income is over Rs 10,000 in a financial year, banks deduct TDS)