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Fincash » Fixed Deposit » FD Interest Rates 2022

Fixed Deposit (FD) Interest Rates 2022

Updated on June 22, 2022 , 141187 views

Fixed Deposits (FD) have always been one of the popular modes of investment in India. It gives better returns as the interest rate offered are comparatively higher than Recurring deposit or Savings Account. The FD interest rates vary from 4% p.a. to 7% p.a, depending on the tenure of the investment. Senior citizens earn a higher rate of interest compared to the regular citizens.

FD-Rates

In this scheme, it is seen that the higher the tenure, the higher the interest rate and vice versa. Another advantage of this scheme is that investors can determine their potential Earnings by using the FD interest formula even before Investing!

Fixed Deposit (FD)

Fixed deposits are a great investment tool for risk-averse investors. FD scheme not only encourages a habit of healthy saving, but also provides high liquidity, so investors can exit at will. In this scheme, you can deposit a principal amount for a fixed tenure and upon maturity, you will get the principal amount along with the interest earned over the tenure.

While investing, it is advisable that you compare FD interest rates of various banks and choose the one that gives you the desired returns.

Type of FD Schemes

1. Standard Fixed Deposit

These are regular Fixed Deposit schemes that have a wide Range of fixed tenures ranging from 7 days to 10 years. The interest rates are determined at the time of deposit. The rate varies by issuer depending upon the deposited amount, the tenure, and whether it is a regular citizen or senior citizen scheme.

2. Floating Rate Fixed Deposit

Under this scheme, the FD interest rates are not fixed. It fluctuates during the tenure depending on the changing Reference Rate. This allows investors to take the benefits of a change in the FD rates (assuming it increases).

3. Tax Saving Fixed Deposit

Here investors can enjoy certain tax benefits, but is accompanied by certain limitations. The scheme has a minimum deposit period of five years and a maximum of 10 years. It doesn’t allow premature withdrawal or even a partial withdrawal till five years. But, under this scheme, an investor can claim deductions up to INR 1,50,000 on the money invested under Section 80C of the income tax Act, 1961. However, the interest earned on such FDs is fully taxable. tax saving FD interest rates vary from 6.00% to 8.00% p.a.

4. Senior Citizen Fixed Deposit

As the name suggests, this scheme is meant for those who are above 60 years of age. Generally, senior citizens get higher interest rates against a fixed deposit that typically range anywhere from 0.25% to 0.65% and higher. As far as the tenure is concerned, under such an FD, they remain flexible.

5. Cumulative Fixed Deposit

Under this scheme, the interest rates don’t stay fixed. This type of an FD helps corpus to grow significantly as the interest rate compounding is put into action every quarter or year and is paid during the time of maturity.

6. Non-Cumulative Fixed Deposit

This type of an FD is adequate for those who are either retired or living through pensions. With this scheme, interest rate is either paid monthly, quarterly, half-yearly or yearly according to the depositor’s choice.

Also, post-retirement, having such type of an FD turns out to be a good investment option.

How to Choose a Fixed Deposit?

All around the country, FDs have been quite a popular option, courtesy to the security and safety of the invested principal amount that they offer. With an FD, managing financial objectives and ensuring future security becomes easier.

Also, investments of fixed deposits can also involve securing the future of children by collecting funds for education, marriage, or any other unanticipated situations in the future.

However, before you begin to choose a fixed deposit in a Bank of your choice, it is important that you keep these following points in mind.

1. Safety

Fixed deposits, undoubtedly, are the most secured investment options that boast of a guaranteed return. But most of the times, credit agencies don’t rate the Offering of FDs by corporates or other non-banking institutes.

Thus, before making an investment, make sure that you cross-check the ratings of the agency cautiously.

2. Minimum Amount

Generally, the amount of deposit varies from a bank to a bank. Each one of them has defined a maximum and minimum limit. Therefore, the experts recommend that you dive into this Factor wisely before putting your money.

3. Tenure

Under a fixed deposit, the tenure may range anywhere from 7 days to 10 years. At the end of the day, choosing what best suits your requirements is of utmost importance.

The reason behind this is because premature withdrawal may come with massive penalties that may lead to a huge reduction in the total amount of interest earned upon the investment.

4. Tax Deduction

Under the section 80C of the Income Tax Act, fixed deposits provide tax exemption. You can easily claim a maximum of Rs. 1.5 lakhs through an FD. This way, along with resting assured of a regular future income, you can also save a bomb with Taxes.

5. FD Interest Rates

In terms of an interest rate, different banks offer varying rates. It majorly depends upon the discretion, the investment amount and the tenure. Since they are not fixed rates, make sure you research well enough before choosing a deal.

Why the FD Interest Rates Keep Fluctuating?

Basically, the fixed deposit interest rate is a factor of the Economy’s situation and the consistent monetary policy adoptions by the Reserve Bank of India (RBI).

Some of the factors that lead to an increase or decrease in the rates of the fixed deposit are mentioned as below:

  • The rates of fixed deposit are linked to the Inflation rates as investors anticipate a positive return
  • Although proper liquidity situation doesn’t compel borrowers toward aggressive borrowing rate, this is opposite during the times of tight liquidity position
  • The expectations of alterations in the monetary policy or cut-off in lending rates
  • Supply and demand conditions for credit may lead to changes in the fixed deposit rates
  • Borrowers own fund costs, falling Call rates, credit demand and other similar factors may also cause a variation in these rates

FD Interest Rates 2022

Here is a list of FD interest rates offered by various banks. The interest rates for FDs have been grouped according to the standard FD scheme and senior citizen FD scheme.

Bank Name FD Interest Rates (P.A.) Senior Citizen FD Rates (P.A.)
Axis Bank 3.50% - 6.85% 3.50% - 7.35%
State Bank of India 5.25% - 6.25% 5.75% - 6.75%
HDFC Bank 3.50% - 6.75% 4.00% - 7.25%
ICICI Bank 4.00% - 6.75% 4.50% - 7.25%
Kotak Bank 3.50% - 6.85% 4.00% - 7.35%
Bank of Baroda 4.25% - 6.55% 4.75% - 7.05%
IDFC Bank 4.00% - 7.50% 4.50% - 8.00%
Indian Bank 4.50% - 6.50% 5.00% - 7.00%
Punjab National Bank 5.25% - 6.60% 5.75% - 7.10%
Allahabad Bank 4.00% - 6.50% -
Bank of India 5.25% - 6.60% 5.25% - 7.10%
Central Bank of India 4.75% - 6.60% 5.25% - 7.00%
UCO Bank 4.50% - 6.50% -
Citibank 3.00% - 5.25% 3.50% - 5.75%
Federal Bank 3.50% - 6.75% 4.00% - 7.25%
Karnataka Bank 3.50% - 7.25% 4.00% - 7.75%
DBS Bank 4.00% - 7.20% 4.00% - 7.20%
Bandhan Bank 3.50% - 7.00% 4.00% - 7.50%
Dhan Laxmi Bank 4.00% - 6.60% 4.00% - 7.10%
Jammu & Kashmir Bank 5.00% - 6.75% 5.50% - 7.25%
Yes Bank 5.00% - 6.75% 5.50% - 7.25%
Standard Chartered Bank 4.25% - 6.85% 5.00% - 7.35%
Vijaya Bank 4.00% - 6.60% 4.50% - 7.10%
Bank of Maharashtra 4.25% - 6.50% 4.25% - 7.00%
Canara Bank 4.20% - 6.50% 4.70% - 7.00%
HSBC Bank 3.00% - 6.25% 3.50% - 6.75%
DHFL 7.70% - 8.00% 7.95% - 8.25%

*Disclaimer- The FD Interest Rates are subject to frequent change. Before starting a Fixed Deposit scheme, do inquire with the concerned banks or visit their websites.

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Various Banks FD Interest Rates

Here's a detailed FD interest rates of various banks as per investment tenure and investment amount.

Union Bank of India FD Interest Rates

Here's the list of Union Bank FD Rates, applicable for deposits of <INR 2 Crore.

w.e.f November 01, 2021

Tenure FD Interest Rates (p.a.)
7 – 14 Days 3.00%
15 – 30 Days 3.00%
31 – 45 Days 3.00%
46 – 90 Days 3.50%
91 - 120 Days 3.75%
121 to 180 Days 4.30%
181 Days to <1 Year 4.40%
1 Year 5.00%
>1 Year to 2 Years 5.10%
>2 Year to 3 Years 5.30%
>3 Years to 5 Years 5.40%
>5 Years to 10 Years 5.50%

SBI FD Interest Rates

State Bank of India (SBI) Fixed Deposit Rates for deposits below INR 2 crore.

w.e.f November 01, 2021

Tenure FD Interest Rates (p.a.)
7 days to 45 days 2.90%
46 days to 179 days 3.90%
180 days to 210 days 4.40%
211 days to less than 1 year 4.40%
1 year to less than 2 years 5.00%
2 years to less than 3 years 5.10%
3 years to less than 5 years 5.30%
5 years and up to 10 years 5.40%

IDBI Fixed Deposit Interest Rates

Here's a list of IDBI FD Interest rates for deposits of below INR 2 crore.

w.e.f. August 16, 2021

Tenure FD Interest Rates (p.a.)
0-6 Days NA
07-14 days 2.70%
15-30 days 2.70%
31-45 days 2.80%
46- 60 days 3.00%
61-90 days 3.00%
91-6 months 3.50%
6 months 1 day to 270 days 4.30%
271 days upto< 1 year 4.30%
1 year 5.05%
> 1 year - 2 years 5.15%
>2 years to < 3 years 5.20%
3 years to to < 5years 5.40%
5 years 5.25%
> 5 years - 7 years 5.25%
>7 years - 10 years 5.25%
>10 years - 20 years 4.80%

HDFC FD Rates

Here's the list of HDFC FD interest rates applicable for deposits of below INR 2 crore.

w.e.f 1st December, 2021

Tenure FD Interest Rates (p.a.)
7 - 14 days 2.50%
15 - 29 days 2.50%
30 - 45 days 3.00%
46 - 60 days 3.00%
61 - 90 days 3.00%
91 days - 6 months 3.50%
6 mnths 1 days - 9 mnths 4.40%
9 mnths 1 day < 1 Year 4.40%
1 Year 4.90%
1 year 1 day - 2 years 5.00%
2 years 1 day - 3 years 5.15%
3 year 1 day- 5 years 5.35%
5 years 1 day - 10 years 5.50%

Bank of India FD Rates

The above rates are applicable for deposits of below INR 2 crore.

As on November 01, 2021

Tenure FD Interest Rates (p.a.)
7 days to 14 days 2.85%
15 days to 30 days 2.85%
31 days to 45 days 2.85%
46 days to 90 days 3.85%
91 days to 179 days 3.85%
180 days to 269 days 4.35%
270 days to less than 1 year 4.35%
1 year and above to less than 2 years 5.00%
2 years and above to less than 3 years 5.05%
3 years and above to less than 5 years 5.05%
5 years and above to less than 8 years 5.05%
8 years and above to 10 years 5.05%

Bank of Baroda FD Interest Rates

The above rates are applicable for deposits of <INR 2 crore.

As on November 01, 2021

Tenure FD Interest Rates (p.a.)
7 days – 14 days 2.80%
15 days – 45 days 2.80%
46 days – 90 days 3.70%
91 days – 180 days 3.70%
181 days – 270 days 4.30%
271 days – Less than 1 year 4.40%
1 year 4.90%
Above 1 year – 400 days 5.00%
Above 400 days – Up to 2 years 5.00%
Above 2 years – Up to 3 years 5.10%
Above 3 years – Up to 5 years 5.25%
Above 5 years – Up to 10 years 5.25%

Axis Bank FD Interest Rates

The below rates are applicable for deposits of below INR 2 crore.

As on November 09, 2021

Tenure FD Interest Rates (p.a.)
7 days to 14 days 2.50%
15 days to 29 days 2.50%
30 days to 45 days 3.00%
46 days to 60 days 3.00%
61 days to less than 3 months 3.00%
3 months to less than 4 months 3.50%
4 months to less than 5 months 3.50%
5 months to less than 6 months 3.50%
6 months to less than 7 months 4.40%
7 months to less than 8 months 4.40%
8 months to less than 9 months 4.40%
9 months to less than 10 months 4.40%
10 months to less than 11 months 4.40%
11 months to less than 11 months 25 days 4.40%
11 months 25 days to less than 1 year 4.40%
1 year to less than 1 year 5 days 5.10%
1 year 5 days to less than 1 year 11 days 5.15%
1 year 11 days to less than 1 year 25 days 5.10%
1 year 25 days to less than 13 months 5.10%
13 months to less than 14 months 5.10%
14 months to less than 15 months 5.10%
15 months to less than 16 months 5.10%
16 months to less than 17 months 5.10%
17 months to less than 18 months 5.10%
18 months to less than 2 years 5.25%
2 years to less than 30 months 5.40%
30 months to less than 3 years 5.40%
3 years to less than 5 years 5.40%
5 years to 10 years 5.75%

Formula to Calculate Fixed Deposit Interest

Even though FD interest rates vary bank to bank, investors can still determine their potential earnings by using FD interest formula.

FD Interest Rate Formula- A=P(1+r/n)^nt

Where,

  • A= Maturity Value
  • P= Principal Amount
  • r= Rate of Interest
  • t= Number of Years
  • n= Compound Interest Frequency

Using the FD Interest Formula investors can determine their potential earnings.

Illustration- If you invest INR 5000 monthly with an annual interest rate of 6% p.a. which is compounding annually, then after 5 years your total invested amount of INR 300,000 will grow to INR 3,49,121. That means, you are making a net profit of INR 49,121.

Using the above formula, investors can estimate the interest earned and the maturity value of the principal amount.

How to Open an FD Account?

The procedure for opening an FD account can be completed both online and offline. These days, a majority of banks provide both the facilities to choose from.

All you would have to do is fill up the necessary form and submit a few documents.

Opening an FD Account Online

If your KYC is completed with the bank already, you can open an FD account online. This way, you wouldn’t have to submit the documents. To do so, follow these steps:

  • First of all, ensure that you have an account with the desired bank
  • Then, log into your current or saving account through net banking
  • Click on the Menu where you will find transaction/deposit option
  • Choose the Fixed Deposit and click on 'new fixed deposit account'
  • Fill in all the details as asked, including the nominee, tenure, principal amount and more
  • Thereafter, the set amount will automatically get debited from your account
  • You will then receive a downloadable online Receipt

Opening an FD Account Offline

If you don’t have access to net banking, you can also open a fixed deposit account offline by following these steps:

  • Visit the nearest branch of the chosen bank and fill the fixed deposit application form
  • If you don’t have an existing account with the bank, submit the KYC documents, such as address proof, identity proof, Pan card, and more
  • Submit these documents along with the signed and properly filled application form
  • Deposit the amount either through Debit Card, online transfer or a cheque

And you are done.

FAQs

1. Are the interest earned from FDs taxable?

A- Yes, interests earned from FDs are taxable. Banks deduct a TDS of 10% on FDs if the interest income is above Rs. 10,000. And 20% if the PAN has not been provided. You are expected to pay an additional 10% tax if you fall under the higher income bracket.

2. How can you save on taxes on your FDs?

A- If you opt for a Tax Saving deposit scheme, you can save taxes on your FDs. You will have to invest for a minimum period of five years and a maximum of ten years. The investment amount cannot exceed 1.5 lakh rupees.

3. Which should I opt for a floating rate or standard rate of FD?

A- In a floating rate, interest rate moves in tandem with a reference rate, which is periodically reset. This gives you an advantage of the interest rate changes without closing and re-booking the FD. At certain times you will make more than the standard rate.

4. When should I opt for a standard rate of FD?

A- If you do not want the interest rate to change, you should opt for your FD's standard rate. It is best if you do not want to take any risk with your investment.

5. Why do FDs have higher interest rates than savings deposits?

A- Fixed deposits have a higher tenure and cannot be withdrawn before maturity. If you withdraw before maturity, then you will have to pay the penalty. Hence, the banks pay higher interest rates on the FDs compared to savings deposits.

6. Is the interest formula for calculating FDs the same for all banks?

A- Yes, banks use the same formula to calculate interest for FDs. So whether you are opening an FD in a nationalized bank or a privatized bank, the interest calculation formula will be the same.

7. Can I use my FD to save on my taxes?

A- As per the 80C of Income Tax Act, you can save taxes up to 1.5 lakh rupees on your FDs. Beyond this amount, your FDs become taxable.

8. What benefit will the bank give me if open a term deposit account?

A- Banks provide a higher rate of interest compared to a savings account. You will get the amount as interest payable on the money invested as a fixed deposit.

9. Can I withdraw the principal amount before the tenure expires?

A. Yes, you can. However, to do so, make sure that the bank is providing you a premature Facility with the fixed deposit. Also, keep in mind that while doing so, you may have to pay a penalty.

10. Is it possible to take a loan against fixed deposit?

A. Yes, you can pledge your fixed deposit to take a loan. Most of the banks provide anywhere between 90% to 95% of the fixed deposit amount as a loan. However, this will strictly depend upon the bank and the amount that you have in your fixed deposit account.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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