Highest Fixed Deposit Interest Rates (2023)

The highest interest rate is offered by the ESAF Small Finance Bank (for 12 months) at 8.75% per annum and Suryoday Small Finance Bank (for 12 months) at 8.50% per annum followed by Utkarsh Small Finance Bank (for 12 months) 8.25%.

Bank TenureFD Interest Rate (p.a.)Interest RatesCalculate
Bandhan Bank 12 Months7.00%
Dcb Bank 12 Months6.75%
Citi Bank12 Months6.75%
Syndicate Bank12 Months6.50%
Canara Bank12 Months6.50%
Karnataka Bank 12 Months6.40%
South Indian Bank12 Months6.40%
Punjab National Bank12 Months6.30%
Corporation Bank12 Months6.30%
Union Bank Of India12 Months6.30%
Oriental Bank Of Commerce12 Months6.30%
Andhra Bank12 Months6.30%
United Bank Of India12 Months6.30%
Karur Vysya Bank12 Months6.30%
City Union Bank 12 Months6.25%
Indusind Bank12 Months6.25%
Yes Bank12 Months6.25%
Idbi Bank12 Months6.25%
Jammu And Kashmir Bank 12 Months6.25%
Idfc First Bank12 Months6.25%
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

The objective of bank fixed deposit is to earn better returns on idle money than savings account, FD interest rates varies from bank to bank depending upon tenure. To create an fixed deposit, you require lump sum investment for a fixed tenure and on this invested amount, banks offer you to get a fixed interest periodically till the end of the term. Now-a-days many banks offer competitive & attractive interest rates on FD for Senior Citizens and NRE/ NRO customers. You can also calculate FD interest rate, this will help you to take a proper investment decision.

The advantage of FD is that bank offers loan facility upto 90% of the amount on the FD and the interest rate to such loan is around 0.50% to 2.00% higher than the fixed deposit rate. Another advantage of FD is periodic income (interest) can be transferred periodically to savings account. To know more advantage of fixed deposit check diffrence between FD Vs RD.

The disadvantage of FD is tax deduction at source (TDS) at the rate of 10% on interest earned, if it exceeds Rs. 10,000 in one financial year.

Fixed Deposit Highlights

  • Maximum Investment Amount: No such limit
  • Interest Rates Variable: from 7 to 9% based on tenure
  • Interest Rates Compounding: Quarterly
  • Interest earned is taxable: Yes
  • Liquidity: Yes
  • Tenure: 7 days to 10 years
  • Income Tax Rebate u/s 80C: Yes upto Rs 1,50,000/- p.a., but on FD with a lock in period of 5 or more years
  • Maturity Value: Taxable
  • Premature Withdrawals: Entire amount, anytime but after charging a certain penalty
  • Loans/Overdraft: Overdraft facility upto 90% of the amount in the FD
  • Tax Deduction at Source: Yes at the rate of 10% on interest earned if if it exceeds Rs. 10,000 in one financial year
  • Risk: Risky as compared to PPF
  • Periodic Income: Yes

Things To Do Before Investing in Bank Fixed Deposit

(1) Decide Upon the Tenure of Bank FD: It is needed to decide the tenure for which you can keep the funds in a Bank FD. It can be done by estimating as to for how long you don't require invested funds.

(2) Decide Upon the Amount of Investment: You will have to decide the amount of funds to be invested in Bank FD. You should not invest your whole savings in Bank FD but should diversify it well. You can take the help of a financial consultant for the same.

(3) Select the Right Bank to Make an FD: It is the most important thing to select the best bank to open your FD with. You must compare the FD interest rates offered by various banks to select the right bank. As the interest rates offered by the banks change on regular intervals, you need to check the latest interest rates offered by different banks from their respective official websites. You must not ignore other aspects also such as customer servicing, online investment option, fast processing, nearby branch presence, etc. while selecting the bank to start the FD.

Tips to Earn More Money from Fixed Deposits

Compare FDs Interest Rates offered by Different Banks

You must compare interest rates offered by various banks and choose the right bank which offer you the best interest for a given tenure. You can take the help of websites of banks or financial aggregators to do the same.

Make the FD in the name of Senior Citizen Family Member

If you have senior citizen parents then it is better to invest money in their name because banks usually offer higher interest rate to senior citizen which is 0.50% higher than that of a person aged below 60 years.

Choose Cumulative Interest Option

If you do not require any monthly income, you should opt for "Cumulative Option" for interest wherein your interest will be reinvested and given to you on maturity.

Do not Withdraw FD Prematurely

You should avoid withdrawal of FD before its maturity in order to save on penalty. If you have urgent need of fund, you should arrange it from somewhere else instead of breaking your FD prematurely. You can even opt for loan against your FD for arranging for short term fund needs.

Split Your FD Amount

You should remember that banks deduct TDS on your interest income if it exceeds Rs 10,000 in a given financial year. In order to avoid deduction of TDS, you should split your total FD amount into different blocks and open FDs with different banks in such a way so that total interest income from a single FD would not exceed Rs 10,000 in a financial year.

Submit Form 15G/ 15H to avoid TDS

Whenever the interest income is over Rs 10,000 in a given financial year, banks are required to make a TDS at certain rate from the interest income released to the FD account holder. One can avoid such deduction by submitting Form 15G/ 15H, if one's income is non-taxable. In such a way, he will have receive interest without TDS deduction.

Invest money in Corporate Deposit

Corporate Deposits offer higher interest to the customers that the same provided by banks. They provide 1.50% to 2% higher interest rate than that of banks. In order to earn more, one can think of investment in corporate deposits. While selecting company for corporate deposit, look for corporate deposits which have good credit rating.