Which banks or financial institutes offer the best FD rates? Take a look

Fixed deposits (FDs) are a cornerstone of financial planning for many in India, offering a secure and predictable return on investment. The essence of a fixed deposit lies in its ability to offer pre-determined returns while ensuring the principal amount remains intact.

Investors can rest easy, knowing their investment is not subject to market fluctuations.

Banks too enhance the attractiveness of FDs by offering flexible interest payment options, either at regular intervals or at maturity, catering to various financial planning needs. This feature, coupled with the guaranteed return, makes FDs a go-to for individuals with a low-risk tolerance and limited market knowledge.

But do you know which banks or financial institutes offer the best FD rates? Take a look

Small Finance Banks

Surprisingly, small finance banks currently offer the most competitive returns.

1. AU Small Finance Bank

Yearly interest rate between 6.5% - 8%

Tenure ranging between 1 year and 5 years.

2. Equitas Small Finance Bank

Yearly interest rate between 7.25% - 8.5%

Tenure: 444 days

3. ESAF Small Finance Bank

Yearly interest rate between 6% - 8.25%

Tenure ranging between 2 years and 5 years

4. Fincare Small Finance Bank

Yearly interest rate between 7.65% - 8.61%

Tenure: 750 days

5. Jana Small Finance Bank

Yearly interest rate between 7.25% - 8.50%

Tenure: 1 year

Private Sector Banks

1. Axis Bank

Yearly interest rate between 6.70% -7.20%

Tenure: 17 months to less than 18 months

2. Bandhan Bank

Yearly interest rate between 5.85% - 7.85%

Tenure: 500 days

3. City Union Bank

Yearly interest rate between 6.25% - 7%

Tenure: 400 days

4. CSB Bank

Yearly interest rate between 5% - 7.75%

Tenure: 401 days

5. DBS Bank

Yearly interest rate between 6.50% - 7.50%

Tenure: 376 days to 540 days

Public Sector Banks

1. Bank of Baroda

Yearly interest rate between 6.50% - 7.25%

Tenure: Above 2 years to 3 years

2. Bank of India

Yearly interest rate between 6% - 7.25%

Tenure: 2 years

3. Bank of Maharashtra

Yearly interest rate between 6% - 7%

Tenure: 200 days

4. Canara Bank

Yearly interest rate between 6.70% - 7.25%

Tenure: 444 days

5. Central Bank of India

Yearly interest rate between 6.7% - 7.25%

Tenure: 555 days

Foreign Banks

1. Deutsche Bank

Yearly interest rate between 7% - 8%

Tenure: Above 1 year to 3 years

2. HSBC Bank

Yearly interest rate between 4% - 7.25%

Tenure: 732 days to less than 3 years

3. Standard Chartered Bank

Yearly interest rate between 6.75% - 7.10%

Tenure: 2 years to less than 3 years

Company Fixed Deposits

Company Fixed Deposits (CFDs) are Term Deposits offered by companies viz. manufacturing firms and housing finance ventures.

1. Shriram Finance FD

Yearly interest rate between 7.34% - 8.27%

Tenure ranging between 1 year and 5 years.

2. Mahindra Finance FD

FD interest rates of 7.6-8.05%

Minimum deposit amount of Rs 25,000

Tenure between 3 years and 5 years

3. Manipal Housing Finance Syndicate Ltd

FD interest rates of 7.75-8.25%

Tenure between 1 year and 3 years

4. PNB Housing Finance Ltd

FD interest rates of 7.45-7.85%

Tenure between 3 years and 4 years

5. Sundaram Home Finance

FD interest rates of 7.45-7.9%

Tenure between 4 years and 5 years

 

Benefits for senior citizens

Senior citizens enjoy additional benefits with FDs, including the opportunity to earn up to 50-80 basis points more than the standard rates. This perk can significantly enhance returns, especially over longer tenures. Banks cater to the varied needs of senior citizens by offering flexible tenures and options for interest payouts, enabling them to tailor their investments to their financial goals and requirements.

Is it the best saving instrument?

FDs, while safe, typically offer lower returns compared to other investment vehicles such as mutual funds or equities.

Low Rate of Return: FDs often lag behind other investments in terms of growth potential. With average bank FD rates hovering around 5%, the accumulation of wealth over time can be modest, especially for those making smaller monthly contributions.

Inflation's Impact: The returns from FDs barely outpace inflation, offering a mere 1% to 1.5% above the current rate. This minimal growth suggests that your investment may not significantly increase in real terms.

Taxation: Interest earned on FDs exceeding Rs 10,000 is taxable, with banks deducting TDS at 10%.