The habit of saving money isn’t something one can master overnight; it’s a long process that
takes a lot of discipline. Thanks to the various useful investment instruments banks and other
financial institutions offer, building the habit of saving money is now easier than ever. In India,
FDs have been a prevalent choice for investment for decades, as they tick all the boxes
regarding safety and stability.
With an FD, the invested funds stay in safe hands, and customers can also earn great interest
rates regardless of the volatile market situation. So, if you are new to this concept and want to
start saving money in the best way possible, you have come to the right place.
Consider this article your ultimate guide to finding the best FD rates in India.
Fixed Deposits – Concept, Benefits, and More
A Fixed Deposit is a deposit where a certain amount of funds is locked for a fixed time. The best
part is that the person can not only choose the tenure of the deposit but also earn a handsome
interest rate from their funds monthly. At the end of the term, the investor receives the principal
amount they have invested along with the maturity interest.
FD is a wonderful investment tool for people of all age groups, especially beginners, because
there is no market risk involved. Besides that, here are some more benefits that come along
with an FD:
●Tax Savings: You can pick 5-year tax-saver Fixed Deposits for tax savings and receive
Section 80C deductions.
●Compounding Interest: If you opt out of regular payouts and instead reinvest your
interest income, compounding interest will enable you to build up a sizable corpus when
the investment matures.
●All-Around Security: Returns from FDs are safe and guaranteed. Despite changes in
the market, you will get your returns as promised by your bank throughout the tenure of
your deposit. Concerning Fixed Deposits, there are no links to market volatility.
●Attractive Interest Rate: The rate of interest offered for FDs is significantly higher than
most other investment tools provided by financial institutions. Many banks offer higher
interest rates to senior citizens to make their lives more financially secure post-
retirement.
Factors that Impact FD Interest Rates
Even if you start by investing a small amount in FD, knowing which factors will make things work
out is the key to a successful financial future. Here are the factors to consider before investing in
an FD:
●Repo Rate
The repo rate is one of the main factors influencing interest rates on Fixed Deposits. The
Reserve Bank of India (RBI) determines the repo rate, which is the fee the RBI assesses
on loans to India’s commercial banks. Banks look to the current repo rate for guidance in
determining FD interest rates. Investors can monitor changes in repo rates for the best
opportunity to invest in an FD plan and maximise returns.
●Investor’s Age
As previously discussed, many banks offer a higher interest rate to senior citizens than
those under 60. For example, if a bank generally provides 7% interest per annum on
FDs, a senior citizen will likely get 0.5% more interest.
●Tenure
The deposit duration should be considered when choosing the most suitable FD plan
with the highest interest rate. The tenure, or duration, of the FD, can last between a few
months and several years. However, it also means that the funds will remain longer.
A longer tenure commonly signifies higher rates of interest. Make sure to pick a tenure
that best fits your financial goals. Consider using an FD interest calculator to
understand which plan will work best for you. This way, you will not only get an accurate
estimation but also be able to compare multiple options at the same time.
●Principal Amount
If you invest more in an FD, you will have a higher interest rate. This means your returns
will be more substantial than investing a smaller amount. With a higher investment, you
may also have the opportunity to negotiate better terms or benefits from the financial
institution offering the Fixed Deposit.
How to Find the Best FD Rates in India
The hype of FDs has remained unaffected even after all these years. The security it provides is
enough to attract a large number of investors. Now that you have a clear concept of FD and
how FD interest rates work, it’s time to understand how to find the best fit for yourself.
Conduct a Comprehensive Research
The first thing you should do before selecting a financial institution for FD is conduct
comprehensive research with multiple banks and NBFCs. Each institution will offer different FD
rates and benefits, so consider all aspects before selecting. Listed below are the FD interest
rates offered by some of the top banks in India:
| Fixed Deposit Scheme | Interest Rates for Non-Senior Citizens | Interest Rates for Senior Citizens |
| ICICI Bank FD | 7.1% | 7.6% |
| Union Bank of India FD | 7% | 7.5% |
| State Bank of India | 7.1% | 7.6% |
| Central Bank of India | 6.75% | 7.25% |
Make Use of Online FD Interest Calculators
An FD interest calculator can be the ultimate game-changer when used correctly. This
calculator will allow you to calculate the maturity amount of various FD schemes in just a few
seconds. All you need to do is enter details in the calculator, including the amount you are
investing, the rate of interest offered in the scheme, and the tenure of your investment. Compare
the maturity amounts of various schemes to find your perfect pick.
Read Customer Feedback
Discuss FD schemes with your friends and family to understand their experience better. You can
also read customer feedback online to make well-informed and confident decisions later.
Conclusion
Finding the best FD rates in India is crucial to achieving your financial goals. With the
assistance of an FD interest calculator, you can make informed decisions and maximise your
returns. It’s not just about investing your money; it’s about securing your future. So, be diligent in
your research, choose the financial institution that aligns with your objectives, and let the power
of compound interest work in your favour. The path to financial stability and growth begins with
finding the best FD rates in India.
