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Types of Fixed Deposit | Fixed Deposit Scheme
Banks and NBFCs in India offer a number of different types of fixed deposits according to the customer’s specific investment needs. Fixed deposits are categorised into different types according to their features, characteristics, limitations and liquidity. On this page, we will take a look at the different types of fixed deposits available and how you can invest in them.
Top Fixed Deposit Scheme / Type
Banks offer many types of fixed deposits to their customers, allowing them to invest in Fixed Deposits that are modified to their specific needs and budget.
Name of Schemes | For General Citizen (p.a.) | For Senior Citizen (p.a.) |
|---|---|---|
| Tax saving | 3.50% to 7.25 % | 4.00% to 8.00 % |
| NRO | 1.85% to 8.50 % | 3.00% to 9.00 % |
| NRE | 2.00% to 8.25 % | 4.25% to 8.25 % |
| Domestic Term Deposits | 1.85% to 8.50 % | 2.35% to 9.00 % |
| Domestic Bulk Term Deposits | 2.00% to 8.35 % | 2.85% to 8.15 % |
| Corporate FD | 5.25% to 7.40 % | 5.50% to 7.65 % |
| Non-Withdrawable Deposit Rates | 3.50% to 6.10 % | -- |
| NRI Bulk | 4.75% to 6.75 % | -- |
| NRI | 4.75% to 6.75 % | -- |
Other Fixed Deposit Scheme / Type
- Flexi Fixed Deposits
- Senior citizen fixed deposits
- Cumulative fixed deposits
- Non-cumulative fixed deposits
Overview of Fixed Deposits
Lets start with a quick overview of fixed deposits which will help to determine how it’s different from other financial instruments:
| Parameters | Description |
|---|---|
| Fixed Deposits | It is one of the various investment options in which investors deposit a fixed amount for a set time frame. Depositors get the investment returns through interest on the deposited amount at the time of FD maturity. However, banks and financial institutions prohibit premature withdrawal from the accumulated amount. Additionally, you will have to pay the penalty if you decide to reinvest the amount after maturity. |
| Provided By | Banks and Financial institutions |
| How to open FD | Online through the official website or offline by making an in-person visit to the provider |
| Fixed Deposit Types | Fixed Deposit Types Senior Citizen Fixed Deposits Tax Saving Fixed Deposits Flexi Fixed Deposit Company Deposits Cumulative Fixed Deposit NRI Fixed Deposits Non-Cumulative Fixed Deposit Bank Deposits Regular Fixed Deposits Standard Fixed Deposits |
| Risk | Risk-free investment instrument |
| Premature FD Withdrawals | Depositors can make a premature withdrawal but have to pay an associated penalty |
| How to calculate FD returns | Through online FD calculator |
| Fixed Deposit Interest rates | Fixed Deposit Interest rates |
Types of Fixed Deposits in India
You get the option to open a fixed deposit account and invest amounts based on your financial needs. Fixed deposit returns allow you to cope with your short-term and long-term goals. To fulfil versatile customer needs, banks offer different types of fixed deposits. Every fixed deposit has its features, limitations, and advantages. Thus, before starting your investment, determine what benefits you are looking for and which FD best suits your needs.
Based upon varying customer needs, the following types of fixed deposits in India are available for investment
Type of Fixed Deposit | Description |
Bank Fixed Deposits | Banks specifically offers these to customers with existing savings accounts. A few banks offer additional features such as insurance of up to Rs. 5 lakhs. Additionally, bank fixed deposit interest rates are usually lower than the ones provided by non-banking finance companies or NBFCs. |
Company Deposits | NBFCs offer Company or Corporate fixed deposits with higher interest rates. However, higher returns aren’t enough, as you need to look into which companies your funds will be invested in. Invest in companies that have good credit ratings from CRISIL and ICRA. |
Cumulative Fixed Deposits | In Cumulative Fixed Deposits, investors can access the earned interest only at the time of FD maturity. In simple words, the interest amount will not be added to the FD account at regular intervals. This type of fixed deposit is highly suitable for investors not looking forward to regular incomes. The key focus is end returns. Investment tenure for Cumulative fixed deposits ranges from 12 to 60 months. |
Non-Cumulative Fixed Deposits | Non-cumulative FDs are a subset of FDs in which you receive periodic payments of the interest accrued on the principal amount from the financial institution. When opening an FD account with the bank or financial institution, you get the flexibility to select interest frequency for a month, quarter, six months or a year. The time frame for non-cumulative FDs ranges from 12 to 60 months. However, you must know that a more significant interest payout frequency results in a lower maturity amount. The benefit of this FD is that you can get consistent interest payments to cover your short-term financial needs. These FDs are suitable for retirees or pensioners who require consistent investment returns. |
Tax-Saving Fixed Deposits | Tax-saving FDs usually come with a fixed investment tenure of 5 years. The main advantage of counting on tax saver fixed deposits is that you can get a tax deduction as per Section 80C of the Income Tax Act of 1.5 lakhs at maximum. However, you cannot make early or premature withdrawals from this sort of FD. In addition, a lock-in period applies to tax-saver FDs prohibiting early withdrawals. |
Senior Citizen Fixed Deposits | Senior Citizen Fixed Deposits are a particular kind of fixed deposit available to anyone aged 60 or above. The critical advantage of senior citizen FD over other types of FD is that it offers a higher rate of return, enabling seniors to satisfy various financial needs. Senior folks can invest in the FDs designed explicitly for them and avail themselves of an additional 0.25 to 0.75% interest returns on the deposited amount. |
NRI Fixed Deposits | NRI fixed deposits offer higher interest returns contrary to savings accounts. NRI FDs provide higher returns and protect the investor from market volatility. Examples include exceptional returns and a flexible time frame from 12 to 60 months. Additionally, these FDs come with a quick renewal feature and offer investors multiple deposit options. If you belong to the Non-Resident Indian category, invest in this FD from your NRO account as an NRI. Additionally, if you fall in the Person of Indian Origin (PIO) or Overseas Citizen of India, you can invest in NRI fixed deposits. |
Standard/Regular Fixed Deposits: | Of all FDs, Standard Fixed Deposits are the most prevalent ones. Such FDs allow investors to invest for a specified time frame. The interest rate will be fixed for the said tenure. It is the simplest form of fixed deposit. Typically, banks and financial institutions allow you to deposit money for a term between one and ten years. The best part about Regular fixed deposits is the principal amount remains secure, and the investor gets a higher interest rate. The entire process is simple and highly convenient. |
Types of FDs for NRIs
The benefits of fixed deposits are offered to NRIs through Non-resident External (NRE) fixed deposits, and Non-resident Ordinary (NRO) fixed deposits. Here’s what you should know about these types of FDs for NRIs.
NRE Fixed Deposit
NRE fixed deposits are considered the foremost choice for individuals looking forward to investing in foreign currency in Indian rupees. The interest accumulated in the Non-Resident External fixed deposit account is tax-free. Additionally, the principal and interest income are fully refundable, making it entirely different from other types of fixed deposit accounts. One crucial point you need to consider while opening an NRE fixed deposit account is that changes in exchange rates may impact the amount deposited in the FD account.
NRO Fixed Deposit
Non-Resident Ordinary (NRO) fixed deposit accounts allow individuals to deposit money in foreign and Indian currency as per their preference. It is the perfect investing tool for overseas people who want to generate additional income from the Indian financial sector. However, unlike NRO fixed deposits, the funds accumulated in NRO FDs are subject to a 30% tax under Income Tax Act. The absence of an exchange rate adds a benefit to NRO fixed deposits. Another intriguing benefit is that interest income and principal can be fully obtained up to a specific threshold or specified limit.
Benefits of Fixed Deposits
Fixed deposits are considered among the best investment instruments. Investing in fixed deposits opens the door to numerous benefits you definitely dont want to miss out on. Before opening a fixed deposit account, get familiar with an array of benefits FDs offer investors. A few benefits of fixed deposits are listed below:
Risk-Free Investment Instrument
FDs are said to be the safest investment instruments easily accessible in the investment market. It allows you to secure high returns without the involvement of any risks. Investors get a fixed rate of interest throughout the investment time frame. The market fluctuation does not hamper the offered fixed deposit interest rates.
Assured Interest Rates
Regardless of the fixed deposit chosen, the interest returns are deposited in the FD account. You can compute fixed deposit interest through the banks official websites or an FD calculator. It allows you to compute the amount you will receive upon FD maturity.
Hassle-Free Investment Procedure,
The best part about FD investments is that it is simple and hassle-free. You just need a savings account with the bank, and you can use the same to invest in a fixed deposit. You can make your investment online through an official portal or by visiting the nearest bank branch offline. At maturity, it is entirely your call if you want to reinvest the amount or credit it in your savings account.
Availability of Compound Interest
Depositors gets the opportunity to reinvest the FD amount gained at maturity. The depositor chooses the reinvestment tenure based on financial requirements. By compounding the interest, we mean you will get interested in the principal amount and the earned interest amount.
Ease Reinvestment Options
At the time of FD maturity, and you get the option to reinvest the generated returns. The reinvestment process is quick and straightforward. You must ask the bank executive to reinvest the amount in the FD account with a new FD investment tenure.
Flexible Time Frame
Banks and financial institutions allow investors to decide the investment tenure of the fixed deposit. Usually, banks offer flexible time frames from 7 days up to 10 years.
Tax Saving Benefits
Major Indian banks provide tax-saving fixed deposits which cater to lower the payable tax amount. However, you must get in touch with the bank to get detailed information about the tax benefits of FD and other associated data.
Availability of Loan Against Fixed Deposits
You can use the accumulated amount to cope with your urgent financial requirements. There is no need to withdraw the amount by paying the penalty as banks allow you to secure a loan against FD.
Comparison of Fixed Deposit Rates
Once you are aware of the benefits that you can avail of through fixed deposits, the very next thing you need to decide is which bank or financial institution you want to open your FD account with. To come up with the final decision, compare the fixed deposit rates offered by the top banks in India. To make it easier for you, we have compared and tabulated the FD interest rates of top banks.
| Bank Name | Fixed Deposit Rates for General Citizens (per annum) | Fixed Deposit Rates for Senior Citizens (per annum) |
|---|---|---|
| State Bank of India Fixed Deposit | 2.9 to 5.5 Per cent | 3.4 to 6.3 Per cent |
| HDFC Bank Fixed Deposit | 2.75 to 5.75 Per cent | 3.25 to 6.5 Per cent |
| IDBI Bank Fixed Deposit | 2.7 to 5.75 Per cent | 3.2 to 6.5 Per cent |
| Kotak Mahindra Bank Fixed Deposit | 2.5 to 5.9 Per cent | 3 to 6.4 Per cent |
| RBL Bank Fixed Deposit | 3.25 to 6.65 Per cent | 3.75 to 7.15 Per cent |
| Punjab National Bank Fixed Deposi | 3 to 5.6 Per cent | 3.5 to 6.1 Per cent |
| Canara Bank Fixed Deposit | 2.9 to 5.75 Per cent | 2.9 to 6.25 Per cent |
| Axis Bank Fixed Deposit | 2.5 to 5.75 Per cent | 2.5 to 6.5 Per cent |
| Bank of Baroda Fixed Deposit | 2.8 to 5.35 Per cent | 3.3 to 6.35 Per cent |
| IDFC First Bank Fixed Deposit | 3.5 to 6.5 Per cent | 4 to 7 Per cent |
| Bank of India Fixed Deposit | 2.85 to 5.2 Per cent | 3.35 to 5.95 Per cent |
| Punjab and Sind Bank Fixed Deposi | 3 to 5.4 Per cent | 3.5 to 5.9 Percent |
After going through the list of top banks, here’s the list of other banks along with their interest rates specific to an investment tenure
Bank Name | Interest Rates (per annum) | |||
Highest slab (In Per cent) | One Year Time Frame | Three Year Time Frame | Five Year Time Frame | |
Suryoday Small Finance Bank FD | 7.49 % | 6.5 % | 7 % | 6.75 % |
Jana Small Finance Bank FD | 7.35 % | 7 % | 7.25 % | 7.25 % |
ESAF Small Finance Bank FD | 7.25 % | 5.5 % | 5.75 % | 5.25 % |
Utkarsh Small Finance Bank FD | 7.25 % | 6.9 % | 6.75 % | 6.75 % |
Ujjivan Small Finance Bank FD | 7.2 % | 6.7 % | 6.5 % | 7.2 % |
Fincare Small Finance Bank FD | 7 % | 6.25 % | 6.5 % | 7 % |
North East Small Finance Bank FD | 7 % | 5 % | 6.5 % | 6.25 % |
Shivalik Small Finance Bank Limited FD | 7 % | 5.75 % | 5.5 % | 5.5 % |
Deutsche Bank FD | 7 % | 5.25 % | 5.75 % | 7 % |
Equitas Small Finance Bank FD | 7 % | 6.6 % | 6.9 % | 6 % |
AU Small Finance Bank FD | 6.9 % | 5.35 % | 6.9 % | 6.9 % |
RBL Bank FD | 7 % | 6.5 % | 6.55 % | 6.55 % |
DCB Bank FD | 6.6 % | 6.1 % | 6.6 % | 6.6 % |
SBM Bank India FD | 7.05 % | 6 % | 5.85 % | 5.85 % |
IndusInd Bank FD | 6.5 % | 6 % | 6.5 % | 6.5 % |
In India, there are various investing possibilities, although fixed deposits are more popular. FDs foremost features, including safety, security, and constant growth, are the key reasons for escalated FD investments. The bank returns the investment amount plus interest when the FDs term is over, i.e. FD maturity. You can choose an appropriate fixed deposit option from the several fixed deposit kinds that banks provide.
Faq
Which banks offer the best-fixed deposit interest rate?
State Bank of India offers the best-fixed deposit interest rates, followed by HDFC Bank, IDBI Bank and Kotak Bank.
What is better in India, mutual fund or fixed deposit?
Fixed deposits are considered better investment tools as they are risk-free and offer higher returns.
What is the method of calculating the interest rate for fixed deposits?
You can calculate the interest rate for fixed deposits through a Fixed deposit calculator. You will get the return in split seconds by entering a few values.
Which banks give the highest FD rates for senior citizens?
Axis Bank, Bandhan Bank and DBS Bank offer the highest FD interest rates for senior citizens.
How much is the post office fixed deposit interest rate?
For a fixed deposit with 1 to 3 years of tenure, post office FD comes with an interest rate of 5.5%.
Additionally, if you opt for a 5-year tenure, you will get a 6.7% interest rate on your FD.
What is the FD interest for 1 lakh?
The FD interest rate for 1 lakh falls from 2.5% to 6%. However, the offered interest rate will be determined through FD time duration.
Which bank FD rate is high in 2024?
HDFC Bank's FD rate is high in 2024, which clocks at 7.6%
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