The highest interest rate is offered by IDFC Bank (for 4 years) at 8.25% and AU Small Finance Bank (for 4 years) at 8.00% followed by Fincare Small Finance Bank (for 4 years) at 8.00%.
Interest Rate for 4 Years Fixed Deposit - March 2021
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
Fixed Deposit Definition
Fixed Deposit Account are those accounts in which a fixed sum of money is deposited for a specified time usually for a period from 7 days to 10 years. A higher interest rate is offered on fixed deposits which varies from bank to bank according to the amount deposited and duration of investment. Private sector banks and foreign banks offer higher rate of interest as compared to public sector bank in order to attract more deposits.
Fixed Deposit Highlights
- 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: 4 Years
- Maturity Value: Taxable
- Premature Withdrawals: Entire amount, anytime but after charging a certain penalty
- Risk: Risky as compared to PPF
Lesser Known Facts about Bank FDs
- Bank FDs are insured up to Rs. 1 lakh of your deposit under the Deposit Insurance and Credit Guarantee Corporation (DICGC).
- In case of taxation, all FDs are taxable on your income slab rate except for 5-year tax saving FDs. If you invest in 5-year tax saving FD, the interest income received out of it will be tax-free.
- You can avail loan facility against your bank FD. This loan amount can be upto 90% of value of your FD. You can get the loan very quickly and at lower interest rate as compared to other types of loan. Loan cannot be availed against tax-saver fixed deposit.
- Unlike Corporate Deposits, credit rating agencies do not rate bank fixed deposit.
- Senior Citizens get higher interest rate on bank FDs.
- If you have FD with any bank, you can get loans, credit card, or any other product or service of that bank at ease and on favourable terms like loan at lower interest rate, credit card with nil annual fee, etc.
- Auto-renewal of FD facility is provided by the banks in which your FD will automatically get renewed at the interest rate prevailing at the time of maturity for the same tenure for which it was originally booked. In this case, you are not required to keep track of FD's maturity date and there is no loss of interest as well, if you forget withdrawing the amount on its maturity.
- Whenever the interest income is over Rs 10,000 in a given financial year, banks deduct TDS. One can avoid such deduction by submitting Form 15G/ 15H, if one's income is non-taxable.
- For Senior Citizens (who are 60 years or older), TDS will be deducted only when the interest income exceeds Rs.50,000 in a given financial year.
- FDs through sweep-in deposit from your savings account is also offered by many banks which can be used to park your emergency funds. On doing so, you can end up in getting higher returns as compared to that of a savings account.
- Premature withdrawal is not allowed in case of tax-saver fixed deposits.
- Some of the banks also allow you to invest in an FD through phone-banking or ATM.