Fixed deposits (FDs) are among India’s most popular long-term investment options due to their simplicity, safety, and assured returns. A number of banks and financial institutions will offer the latest FD rates in 2023 to attract customers. You will learn how to choose the right FD rate for your needs by comparing India’s top 5 FD rates.
Top 5 FD Rates in India in 2023
HDFC Bank offers India’s highest FD interest rate. There is an interest rate range between 5.50% and 6.40% on FDs from 7 days to 10 years for regular citizens. Senior citizens can expect to pay the latest FD rates between 6.00% and 7.00%. A minimum deposit of Rs. 10,000 is required.
India’s ICICI Bank offers competitive rates on FDs as well. Regular citizens can take advantage of interest rates ranging from 5.50% to 6.30%, and seniors can take advantage of interest rates ranging from 6.00% to 6.80%. Rs. 10,000 is the minimum deposit amount.
For regular citizens, Axis Bank offers interest rates ranging from 5.50% to 6.25%, and for senior citizens, it offers the latest FD rates
ranging from 6.00% to 6.75%. A minimum deposit of Rs. 10,000 is required.
State Bank of India (SBI):
State Bank of India is the nation’s largest bank and can offer competitive interest rates. Currently, the rates on their FDs for normal citizens are between 5.40% and 6.20%. Senior citizens enjoy much higher rates falling between 6.20% and 7.00%, but a minimum deposit of Rs. 1000 is required to start these FDs.
Punjab National Bank (PNB):
Regular citizens can choose between 5.25% and 6.15% interest rates on PNB FDs, and senior citizens can choose between 5.75% and 6.65% interest rates on FDs. Deposits must be at least 1,000 rupees.
How to Choose the Right FD for Your Needs
When comparing FD rates, you should also consider other factors, such as tenure, deposit amount, and tax implications. To help you choose the right FD, here are a few tips:
Decide on the Tenure:
According to the tenure of the FD, the interest rate varies. The rates on short-term FDs (less than one year) are usually lower than those on long-term FDs (more than three years). Consider your financial goals and risk tolerance when choosing a tenure.
Check the Deposit Amount:
An FD account can be opened with a minimum deposit amount that varies from bank to bank. The interest rate you earn may be higher if you deposit more money with some banks. Decide on a bank that suits your budget by checking the minimum deposit amount.
Consider the Tax Implications:
Your income tax slab determines the tax rate on interest earned on FDs. If you are choosing an FD, take tax implications into account. You may want to choose a bank that offers a lower interest rate and tax-saving FD options if you are in a higher tax bracket.
Compare the Interest Rates:
When selecting a few banks based on the above factors, compare their interest rates. Your deposit amount and tenure should be matched with a bank that offers the best interest rates.
Check the Reputation and Safety of the Bank:
The reputation and safety of the bank should be checked before choosing an FD. Ensure the bank you choose is financially stable and has a good history of honouring its FD commitments.
FDs are a reliable and safe investment option for investors seeking guaranteed returns. Choosing an FD should be based on a low-risk, long-term investment option that offers a chance to earn 6%–8% income on deposits. Income Tax Act Section 80C allows individuals to deduct their deposits from their taxable income. FD calculators can help you calculate FD interest if you do not know how to do it. Investors may find FDs less appealing than debt funds due to their lower returns.