Summary:
Bank FD rates vary across banks and investment tenures, with some banks offering rates of 7% or more on select deposits. Comparing interest rates, tenure, premature withdrawal rules, tax implications and deposit safety can help investors evaluate FD options.
Bank fixed deposits (FDs) continue to be a popular investment option for those seeking stable returns with minimal risk. However, comparing FD rates between banks, tenure and other factors are critical for investors to maximise returns
FD interest rates vary from bank to bank and investors must compare to identify the best rate. Even a 1% difference in the rate can have a significant impact on the final amount, especially for large deposits and longer tenures. At the same time, investors must also review other aspects such as premature withdrawal, taxability and safety before investing
FD Interest Rate Comparison Across Banks
The table below compares FD interest rates offered by various banks across different maturity periods:
| Bank | 6 months to <1 year | 1 year to <2 years | 2 years to <3 years | 3 years to <5 years | 5 years and above |
| DCB Bank | 6.00% to 6.50% | 6.90% to 7.10% | 6.90% to 7.50% | 7.00% to 7.10% | 7.00% to 7.50% |
| Jammu & Kashmir Bank | 5.50% to 6.00% | 6.55% to 6.60% | 6.75% to 7.05% | 6.80% | 6.85% |
| YES Bank | 4.75% to 6.50% | 6.65% to 7.25% | 6.90% to 7.00% | 7.00% | 6.75% |
| RBL Bank | 4.75% to 6.05% | 7.00% to 7.20% | 7.20% | 7.00% to 7.20% | 6.70% |
| Tamilnad Mercantile Bank | 6.30% to 6.50% | 6.60% to 7.25% | 7.00% | 6.70% | 6.70% |
| IndusInd Bank | 5.75% to 6.25% | 6.75% to 6.90% | 7.00% | 6.50% to 6.70% | 6.50% to 6.65% |
| Dhanlaxmi Bank | 5.50% to 7.00% | 6.25% to 7.10% | 6.25% to 6.50% | 6.50% to 7.00% | 6.50% to 6.60% |
| Axis Bank | 5.50% to 7.00% | 6.25% to 6.50% | 6.50% | 7.00% | 6.50% |
| ICICI Bank | 4.50% to 5.50% | 6.25% to 6.30% | 6.30% to 6.45% | 6.45% to 6.50% | 6.50% |
| Federal Bank | 4.50% to 6.00% | 6.25% to 6.65% | 6.40% to 6.55% | 6.40% to 6.70% | 6.40% |
| Karur Vysya Bank | 6.00% to 7.00% | 6.55% to 7.20% | 6.55% | 6.55% | 6.25% to 6.55% |
| Kotak Mahindra Bank | 5.00% to 6.00% | 6.35% to 6.55% | 6.80% | 6.40% | 6.25% |
| Canara Bank | 5.25% to 5.50% | 6.25% to 6.60% | 6.25% | 6.25% | 6.25% |
| City Union Bank | 5.75% to 6.25% | 6.65% to 7.25% | 6.50% | 6.25% to 6.50% | 6.25% |
| HDFC Bank | 4.25% to 5.75% | 6.25% to 6.45% | 6.30% | 6.40% to 6.50% | 6.15% to 6.40% |
| Indian Overseas Bank | 4.50% to 5.50% | 6.40% to 6.60% | 6.40% | 6.10% | 6.10% |
Higher Rates Available Mainly In Mid And Long Tenures
The above comparison shows that some of the highest FD rates are available on medium to long-term deposits. DCB Bank, RBL Bank, YES Bank and others offer 7% and above on certain tenures. For instance, a ₹10 lakh FD at 7% will yield ₹70,000 as interest income in a year (before tax) compared to ₹60,000 at 6%. Over longer periods, these rates can make a big difference to the final amount
Factors To Consider Before Selecting An FD
While the interest rate is an important factor, investors must compare FD rates and terms of banks before making an investment decision. Although higher returns are tempting, one must compare rates with the premature withdrawal charges, tax implications and tenure to arrive at the most attractive FD option. Investors should also decide based on their requirements rather than opting for the longest tenure with the highest rate if they do not foresee a need for early withdrawal.
