{"id":39853,"date":"2023-03-03T12:33:47","date_gmt":"2023-03-03T07:03:47","guid":{"rendered":"https:\/\/www.5paisa.com\/finschool\/?p=39853"},"modified":"2025-03-11T15:49:39","modified_gmt":"2025-03-11T10:19:39","slug":"fixed-deposit-interest-rates-have-gone-up-despite-inflation","status":"publish","type":"post","link":"https:\/\/www.5paisa.com\/finschool\/fixed-deposit-interest-rates-have-gone-up-despite-inflation\/","title":{"rendered":"Fixed Deposit Interest Rates \u2013 Know The Best FD Interest Rates of Top Banks"},"content":{"rendered":"\t\t
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Fixed Deposit are the most traditional and common method of investment.\u00a0 They provide guaranteed returns and still today Fixed Deposits are considered safe and smart money back guaranteed investment by many. Because the interest provided by the Fixed Deposits are higher than what a regular savings account provides. If the money is invested for specific period as per the Bank Schemes, the amount invested plus the interest surely gets back to the investor. \u00a0Fixed Deposit Rates are the Interest Rates provided in return for investing the amount.<\/p>

Concept of Fixed Deposits and FD Interest Rates in Detail<\/strong><\/span><\/h2>

So What Exactly is a Fixed Deposit?<\/strong><\/span><\/h3>

Fixed Deposit is a lump sum amount invested in bank for a fixed tenure at an agreed rate of Interest. At the time of maturity i.e. end of the tenure amount is received back along with the compounded interest.<\/p>

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What are FD Interest Rates?<\/strong><\/span><\/h3>

Interest Rates on Fixed Deposit are fixed when the deposits are opened. The Rate of Interest for Fixed Deposits differs bank to bank and the period or tenure also differs.<\/p>

How Fixed Deposit Works?<\/strong><\/span><\/h3>

Fixed Deposits are offered by Banks, Non-Banking Financial Companies, Indian Post office. The Interest rate provided is different by each one of them. The Time period of Fixed Deposits range from 7 days to 10 years. The most important rule with regards to Fixed Deposits is you can withdraw the amount invested before maturity, but there will be penalty charges. Fixed Deposit offers flexibility in choosing the time period.\u00a0 Some banks offer pre mature withdrawal without penalty but in such cases interest provided will be less.<\/p>

What are the Different Types of Fixed Deposits?<\/strong><\/span><\/h3>

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There are different types of fixed deposits in India offered through various banks. Two major types are cumulative and non-cumulative type. In cumulative type of Deposits interest is paid along with the maturity of the Fixed deposit whereas in non-cumulative type the Interest is paid on quarterly basis or monthly or half yearly basis. It depends on the investor\u2019s convenience. Let us understand the types of Fixed Deposits in Detail<\/p>

  • Standard Fixed Deposits<\/strong><\/span><\/h4><\/li><\/ul>

    Standard Fixed Deposits have fixed tenure and the interest rate are pre-determined by the bank. The tenure can range from 7 to 10 years. Interest rates are higher than normal savings account. It is the most popular FD chosen by the Stake holders.<\/p>

    • Tax Saving Deposits<\/strong><\/span><\/h4><\/li><\/ul>

      The Tax Saving Deposits help in saving tax and one can get exemption up to 1.5 lakh per year.\u00a0 These FDs have lock in period of 5 years during which the amount cannot be withdrawn and only one time lump sum deposits can be made. The amount invested gets exemption under section 80C of the Income Tax, 1961 but one thing should be remembered that the interest received through Tax Saver Deposits are Taxable.<\/p>

      • Special Fixed Deposits<\/strong><\/span><\/h4><\/li><\/ul>

        Like Standard Fixed Deposits, Special Fixed Deposits are also invested for a specific period. Special Fixed Deposits offer higher interest rates and if the amount invested is not withdrawn before the period of maturity it would be more beneficial. The name special fixed deposits are because they are issued for a special time period. Usually banks announces special deposits during festivals. The special period can be 450 days, 500 days etc.<\/p>

        • Senior Citizen Fixed Deposit <\/strong><\/span><\/h4><\/li><\/ul>

          The Senior Citizens Fixed Deposit scheme allows senior citizens who have age more than 60 years to open Fixed Deposits Account. These Fixed Deposit schemes provide an additional interest rates of around 0.50% over the regular Fixed Deposit Interest Rates.<\/p>

          • Floating Fixed Deposit<\/strong><\/span><\/h4><\/li><\/ul>

            In Floating Fixed Deposit the rate changes quarterly or yearly and people can avail the benefits of changing interest rates. The change in interest rates is determined by the Reserve Bank of India Guidelines.<\/p>

            • Corporate and Other Fixed Deposits offering High ROI<\/strong><\/span><\/h4><\/li><\/ul>

              Corporate Fixed Deposits are the ones made by the companies for a fixed tenure and at the prescribed interest rate. Financial Institutions and Non-Banking Finance Companies offer this type of deposits. In this case choosing a good company is very important as it will provide more interest rate what banks provide. It is better to check credit ratings of these companies before investing amount. These are unsecured in nature because if the company defaults investors might lose the entire amount invested.<\/p>

              • NRE Fixed Deposits<\/strong><\/span><\/h4><\/li><\/ul>

                NRE Fixed Deposits are for those who are earning foreign currency and wish to convert them to Indian Currency Value. The interest earned on NRE Fixed Deposits is Tax Free and one can get both principal and interest amount as they are repatriable.\u00a0 But here money deposited can be effected due to currency rate fluctuations.<\/p>