Fixed deposit investment is considered one of the most secure and safest investment options. One can deposit a lump-sum amount of money with the bank for a fixed period at a pre-discussed interest rate and the bank compound the interest on the principal amount. The investor gets its money along with the interest, once the bank FD gets matured.
READ MORE: FD rates are rising | Is this the right time to start a fixed deposit?
Furthermore, senior citizens who are aged 60 and above can apply for a fixed deposit at a higher interest rate. Many banks offer special interest rates to super elderly citizens (aged 80 and above).
According to the recently incorporated section 80TTB of the Income Tax Act, interest earned on deposits held with banks, co-operative banks, or post offices is effectively tax-free up to ₹50,000. Before opening a fixed deposit account with a bank, FD investors, especially senior citizens, should compare the interest rates offered by various banks.
Here are the latest fixed deposit interest rates offered by top 10 banks for below Rs. 2 crore
|Name of Bank||For General Citizens (p.a.)||For Senior Citizens (p.a)|
|State Bank of India||2.90% to 5.50%||3.40% to 6.30%|
|HDFC Bank||2.50% to 5.60%||3.00% to 6.35%|
|IDBI Bank||2.70% to 5.60%||3.20% to 6.35%|
|Punjab National Bank||3.00% to 5.25%||3.50% to 5.75%|
|Canara Bank||2.90% to 5.75%||2.90% to 6.25%|
|Axis Bank||2.50% to 5.75%||2.50% to 6.50%|
|Bank of Baroda||2.80% to 5.35%||3.30% to 6.35%|
|IDFC Bank||2.50% to 6.25%||3.00% to 6.75%|
|Bank of India||2.85% to 5.20%||3.35% to 5.95%|
|Punjab and Sind Bank||3.00% to 5.40%||3.50% to 5.90%|
Note: The given list are the latest fixed deposit interest rates offered by top Indian banks for tenures ranging from 7 days to 10 years as of June 2022.
The returns earned on a fixed deposit are guaranteed. You will receive the same rate of return that was agreed upon when the FD was opened. Market-led investments, on the other hand, provide returns based on interest rate swings in the market. Even if interest rates fall, you will receive the same rate of interest that was agreed upon. As a result, the fixed deposit is more secure than other types of investments. Moreover, you can easily liquidate your FD and utilise the money in an emergency.
READ MORE: Fixed Deposit rates: How do they stack up against interest offered by banks & NBFCs
If you need money right away, you can take out a loan against your fixed deposit. At low fixed deposit rates, you can borrow up to 90% of your deposit amount. It is approximately 2% higher than the FD rate of interest. According to your preferences, you can have your FD interest transferred to your account monthly, quarterly, or annually. Additionally, the Reserve Bank of India insures your deposits up to a ceiling of Rs. 5 lakh.