What is a Fixed Deposit?

A Fixed Deposit is an investment plan that helps you earn interest returns on idle savings. Your returns are predetermined and not affected by market fluctuations. Thus, it could help you diversify your portfolio.

 

You can invest in an FD for short-term or long-term goals. With the aid of our FD calculator , you could estimate the maturity amount in advance. Apply for an FD online on Bajaj Markets and earn guaranteed returns at attractive interest rates of up to 9.40% p.a. 

 

Our Partners
Corporate FD
Corporate FD
Shriram Finance Limited
Interest Rate Up to
9.40% p.a.
Min. Amount
₹5,000
Tax Saver FD
Bank FD
Bank FD
AU Small Finance Bank
Interest Rate Up To
8.50% p.a.
Min. Deposit
₹1,000
Corporate FD
Corporate FD
Bajaj Finance Ltd.
Interest Rate Up to
8.85% p.a.
Min. Deposit
₹15,000
Corporate FD
Corporate FD
Mahindra Finance Ltd
Interest Rate Up To
8.30% p.a.
Min. Deposit
₹5,000
Bank FD
Bank FD
YES Bank
Interest Rate Up To
8.25% p.a.
Min. Deposit
₹10,000
Corporate FD
Corporate FD
PNB Housing Finance Ltd.
Interest Rate Up To
8.15% p.a.
Min. Deposit
₹10,000
Bank FD
Bank FD
Ujjivan Small Finance Bank
Interest Rate Up To
8.75% p.a.
Min. Deposit
₹1,000

Overview of Fixed Deposits

An FD investment requires you to deposit a lump sum amount for a specific timeline with a bank/NBFC. The tenor can vary between 7 days and 10 years, depending on the plan that you invest in.

 

Your earnings depend on three crucial parameters:

  • Deposit  amount

  • Chosen tenor

  • Applicable interest rate

 

You can book a fixed deposit with a bank or a Non-banking Financial Institution (NBFC). Before investing, compare the interest rates offered by them. Then, the FD issuer will provide a fixed deposit receipt online or offline.  

 

This FD receipt contains the following particulars:

  • Name and address

  • Deposit amount

  • FD account number

  • Maturity amount and date

  • Interest rate

  • Nominee details

  • Related terms and conditions

  • Bank declaration

 

Issuers decide the FD interest rate based on the repo rate and internal policies. Your deposit amount and tenor also impact the rate you get. Usually, the longer you stay invested, the higher the rate and the better your earnings. Look out for special tenors offered by issuers. These may also offer higher FD interest rates.

 

While your FD remains locked for the duration, you could liquidate it before the tenor ends. But issuers levy a small penalty when you close your fixed deposit account before it matures.

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Fixed Deposit Calculator

A fixed deposit calculator is an online tool that lets you calculate the interest earnings and maturity value of an FD. All you need to do is enter the following parameters:

  • Deposit amount

  • Tenor or FD duration

  • Applicable FD rate

 

This allows you to compare interest rates offered by various financial institutions, helping you select the right investment terms. In addition, the tool saves you time and effort that would otherwise be spent on intricate calculations.

Deposit Amount

Interest Rate

Tenure

Months

Interest Payout

At Maturity
At Maturity
Monthly
Quaterly
Half Yearly
Yearly

Investment Amount

Interest Rate

Total Interest Amount

Total Payout (Principal + Interest)

Get Returns up to 9.40%* p.a.

Fixed Deposit Offered by Partner Banks and NBFCs

Comparing interest rates is essential before choosing FD plans. See the table below to check the interest rates from banks/NBFCs/HFCs.

FD Issuers

Maximum Interest Rate (p.a.)

Maximum Tenor

(in months)

Minimum Deposit Amount

Bajaj Finance

8.85%

60

₹15,000

PNB Housing Finance Limited

8.05%

120

₹10,000

Mahindra Finance

8.35%

60

₹5,000

AU Small Finance Bank

8.50%

120

₹1,000

YES Bank

8.25%

120

₹10,000

Ujjivan Small Finance Bank

9.00%

120

₹1,000

Shriram Finance

9.40%

60 

₹5,000

Disclaimer: The particulars mentioned are subject to change at the discretion of the issuer. These interest rates are valid as of 29th May 2024. 

FD Interest Rates of Some of the Top Banks/NBFCs in India

Here's a table displaying some of the bank/NBFC FD interest rates offered on deposits less than ₹2 Crores.  

FD Issuer

Maximum Interest Rate for Non-senior Citizens (p.a.) 

Maximum Interest Rate for Senior Citizens (p.a.) 

Tenor

Minimum Deposit

Axis Bank

7.20%

7.85%

17 Months – 18 Months 

₹5,000

ICICI Bank

7.20%

7.75%

15 Months – 18 Months 

₹10,000

SBI

7.00%

7.50%

24 Months  – 36 Months 

₹1,000

Kotak Mahindra Bank

7.40%

7.90%

390 days

₹5,000

IDFC FIRST Bank

7.90%

8.40%

500 days

₹10,000

HDFC Bank

7.25%

7.75%

18 Months  – 21 Months 

₹5,000

Union Bank of India

7.25%

7.75%

399 days

₹1,000

IndusInd Bank

7.99%

8.25%

12 Months – 24 Months 

₹10,000

Muthoot Capital

8.38%

8.88%

60 Months 

₹1,000

Disclaimer: The aforementioned particulars are subject to change at the discretion of the issuer. Kindly refer to the issuer’s website before booking an FD. These financial institutions are not partners of Bajaj Markets.

Types of Fixed Deposits

While comparing FDs based on rates and tenor options, learn the different FD types. Here is a brief overview of a few types you can invest in: 

  • Cumulative FD

These FDs return the principal amount and interest earned at the end of the tenor. They are also referred to as ‘payout at maturity’. Your interest earnings are reinvested throughout the duration of the FD. Hence, the power of compounding comes into play, and you end up earning higher returns.

  • Non-cumulative FD

Here, you can receive your interest at regular intervals. These could be monthly, quarterly, half-yearly, or annual payouts. Your total returns may be lesser when compared to cumulative FDs. This is because your interest earnings are not reinvested. This type of FD may be ideal if you are looking for a regular source of income.

  • Regular FD

It is a standard FD offered by banks and NBFCs across the country. Invest a lump sum amount with an issuer of your choice for a specific tenor. You earn returns based on the predetermined FD interest rate.

  • Corporate FD

This type of fixed deposit is also known as a company FD. They are offered by financial and non-financial banking companies. Before choosing your FD issuer, check their CRISIL and ICRA ratings. It helps ensure that you have invested your funds with a reliable and credible issuer.

  • Post Office FD

Like banks and NBFCs, you can book an FD offered by the India Post for a specific tenor. These FDs are backed by the guarantee of the Indian Government. Hence, you can rest assured about the safety of this investment.

  • Flexi FD

Flexi FD is a type of investment that is linked to a savings account and FD. Here, excess funds from your savings account are transferred to an FD. This allows you to earn higher interest rates. You can also withdraw funds whenever required. 

  • Tax-saving FD

Investing in this fixed deposit scheme is ideal if you want to save on tax. A tax-saver FD has a mandatory lock-in duration of 5 years. It provides tax benefits on the principal/invested amount. This FD qualifies for a tax deduction of up to ₹1.5 Lakhs under Section 80C of the Income Tax Act, 1961. 

  • Senior Citizen FD

This type has been specifically designed for senior investors above the age of 60 years. It functions the way a regular does. In this case, senior citizens are offered higher rates than the general public.  

Types of Fixed Deposits for NRIs

Non-resident Indians (NRIs) can also benefit from competitive FD interest rates. Here two common types of FDs for NRIs: 

  • Non-resident External (NRE) FD

This option may be ideal if you earn in foreign currency and plan to convert the earnings to Rupees. The interest you earn on this type of FD is tax-free. Also, the principal and interest amount is repatriable. 

  • Non-resident Ordinary (NRO) FD

Unlike an NRE FD, the interest income you earn through this fixed deposit is taxable. Opening this account may be ideal if you do not intend to convert the amount. You can repatriate your interest earnings and the principal amount up to a certain limit. 

 

These accounts are not affected by exchange rate fluctuations. You can deposit funds either in foreign or Indian currency.

Special Term Deposits

These fixed deposits offer unique benefits when compared to regular FDs. These advantages may be the eligibility criteria, tenor options, or deposit amount. Here is a quick rundown of a few essential points: 

  • Issuers may offer special FD schemes for minors above the age of 10 years 

  • Some FD may require you to deposit ₹1,000 to you kickstart your investment journey

  • You may not have to pay penalty during premature withdrawal for select FDs

  • You may enjoy higher FD rates when you opt for special tenors

  • Certain issuers allow clubs, societies, firms, and organisations to book special term FDs

  • These FDs are available for odd periods, such as 15 months, 45 days, etc.

 

For instance, if you book an FD with Bajaj Finance for a tenor of 42 months, you could enjoy a higher interest rate of 8.60% p.a.

Long-term and Short-term Fixed Deposit

While booking an FD, choosing the right tenor requires careful consideration. After all, the timeline you plan to stay invested for impacts your returns and liquidity. Here is an overview of key factors that differentiate a long-term and short-term FD.

Basis

Short-term FD

Long-term FD

Purpose

Ideal option when you want to meet your short-term financial goals

Best suited to manage long-term needs, like higher education, wedding expenses, etc.

Returns

Varies based on the issuer’s interest rate

A higher FD interest rate translates to increased earnings

Interest Rate

Lower as you stay invested for a shorter timeline

Higher when compared to a short-term FD

FD Withdrawal

Not advisable due to the shorter tenor

Can liquidate the deposit by paying a small penalty

Benefits of Fixed Deposits

Whether you plan to open a FD online or offline, ensure that it helps you meet the intended goals. Consider a few advantages you stand to gain when you book a fixed deposit account.

Assured Returns

It helps you generate fixed returns, irrespective of market fluctuations

Flexi Tenor

Flexible Tenor Options

You can choose a convenient timeline ranging from 7 days to up to 10 years based on your goals

FD Interest

Credit Facility

Opt for a loan against your FD and get the required funds to manage unforeseen emergencies

Payput

Convenient Payout Options

Choose to receive the accrued interest in regular intervals or at maturity

Renewal

FD Renewal

Liquidate your FD upon maturity or opt for automatic renewal to stay invested for longer 

Tax Benefit

Tax Benefits

Book a tax-saving FD offered by a bank to claim deductions of up to ₹1.5 Lakhs u/s 80C of the Income Tax Act, 1961

sweep

Sweep-in Facility

Opting for this facility helps you amplify your interest earnings by directing excess funds from your savings account to FDs

Features of a Fixed Deposit

Check out some vital features and compare them against other investment options. 

Parameter

Attribute

Investment Term

Varies from days to years, depending on the FD plan

Interest Rate

Predetermined by the issuer

Senior Citizen Benefits

Slightly higher interest rates than those of regular FD rates

FD Booking 

Online or offline based on the issuer’s policies

Types of FDs

Different kinds to suit varying investor profiles and goals

Risk parameter

Low to zero 

FD Account Closure

A small penalty may be levied for premature FD closure 

Fixed Deposits for Future Plans

Fixed deposits could serve as attractive investment options when you capitalise on high interest rates from issuers. Choose an FD plan that helps you manage goals, such as:

  • Meeting your child’s education costs

  • Planning for your or your child’s wedding

  • Making a down payment for your house

  • Saving to purchase a vehicle

  • Building a retirement corpus

  • Creating a emergency fund to manage unforeseen situations

  • Planning a vacation

Who Should Invest in Fixed Deposits

Investing in FDs is ideal if you seek stability and safety. These are suitable investment options if:

  • You are a risk-averse investor looking for a secure investment plan

  • You seek predictable and stable returns

  • You want to meet short-term goals, such as planning for a vacation

  • You want to temporarily park funds to utilise them later

  • You plan to diversify your investment portfolio

  • You want to generate wealth over the long term by utilising the power of compounding

  • You own a business and want to invest the surplus funds in a safe option

  • You are a senior citizen or retiree looking for a regular income source

  • You plan to meet your long-term goals, such as buying an asset

Tips to Invest in the Right Fixed Deposit Scheme

The below tips may help you choose the right FD:  

  • Opt for the Right Investment Timeline

Choose an FD tenor based on your liquidity needs and financial goals. Remember, the interest rates vary with the FD duration. If you choose to stay invested for a longer period, you could earn higher returns. If you want to invest in an FD to meet short-term goals, choose one with a tenor of under 12 months. 

  • Compare Interest Rates

Look for banks/NBFCs offering higher interest rates. This may help you to earn enhanced returns on your deposit. After all, the FD rate has a direct impact on your earnings. Utilise the senior citizen benefits of higher rates and invest funds in your parent’s name. 

  • Check the Application Process

You can book an FD online without visiting a bank or NBFC. To begin investing, you may have to fill a form and transfer funds from your bank account to the FD account.

  • Assess Premature Withdrawal Charges

These costs vary across issuers, so check them before choosing an FD. Note that a few issuers may waive these charges. So, consider these aspects before proceeding. 

 

Documents Required to Open an FD Account

If the issuer already has your Know Your Customer (KYC) details, there may be no need to submit ID and address proof. Complete the application form and fill in the details as requested by the issuer.

Existing Customers

As the issuer already has your Know Your Customer (KYC) details, there is no need to submit ID and address proof. Simply complete the application form and fill in additional details as requested by the issuer.

New Customers

  • Latest passport-size photograph

  • KYC documents (Aadhaar card/PAN card/voter ID/passport)

Companies/Business Entities

  • PAN card on behalf of the firm

  • Bank account statements

  • Incorporation or company registration certificates

  • KYC documents of authorised members

  • Board resolution to book an FD account

  • Partnership deed

  • Articles of memorandum

  • Copy of trust deed

Hindu Undivided Families

  • PAN card of the entity head or Karta

  • HUF declaration

  • KYC documents

  • Passport-size photograph of the head

 

Note that the exact requirements may vary depending on the issuer. Check with the bank or NBFC before booking your fixed deposit.

How to Open a Fixed Deposit Online and Offline

The process is relatively easy when you book an FD online, as it saves time and effort. On Bajaj Markets, you can open your account in just a few minutes. Here is what you need to do:

  1. Click on the ‘INVEST NOW’ tab at the top of the page

  2. Enter your mobile number, date of birth, and PIN code

  3. Verify the OTP to continue the process

  4. Browse the different FD issuer options available and choose one

  5. Once you choose between bank or company deposit, enter the investment amount

  6. Select the tenor and interest payout frequency

  7. Enter your full name and PAN details

  8. After KYC, provide must certain personal details

  9. Add the nominee and bank details

  10. Make the payment

 

Once your payment is successful, your fixed deposit account is booked. You may receive an email alert within 15 minutes.

 

To book an FD offline, follow these steps:

  1. Visit the nearest branch of your FD issuer

  2. Complete the FD application form

  3. Submit the required KYC documents for verification

  4. Transfer the funds from your savings account

 

The concerned representative will inform you once your FD is booked. Collect the Fixed Deposit Receipt (FDR) from the issuer.

Renewals and Withdrawals of Fixed Deposits

You can renew or withdraw the invested FD amount based on your goals and preferences. In most cases, fixed deposits are automatically renewed for the same period and at the same interest rate. You can also renew your plan for better investment terms when the FD matures.

 

Here are some points to note:

  • Withdraw your FD amount and the interest accrued once it matures

  • You must provide standing instructions for auto-renewal 

  • Renew your existing investment within 7 days before maturity if you want to change the terms

  • Opt for auto-withdrawal to get the maturity proceeds credited to your savings account

  • When you opt for a premature withdrawal, the penalty may go up to 1% of the interest

  • Tax-saving FDs come with a mandatory lock-in period of 5 years

Fixed Deposit Sweep-in Facility

This option requires you to link an FD to a savings or current account. Here, the excess funds in your bank account will be transferred to the FD. This helps you improve liquidity, while earning higher interest.

 

If the balance in your bank account falls below the limit, a specified amount is transferred back. This is to help you meet regular expenses. 

 

Consider the following example to understand the concept better. Say you have ₹50,000 in your savings account and you have fixed ₹25,000 as threshold. Any amount exceeding this limit will be swept to your FD automatically.

 

In instances where your savings balance falls below ₹25,000, the same amount gets transferred back from the FD created most recently.  

 

Here are a few benefits of this facility:

  • Ideal for small businesses who do not want to apply for an overdraft against their FD

  • Easy to withdraw the exact sum you need without having to pay a penalty

  • Earn higher interest than what you get to earn in a savings or current account

  • You only lose interest on the money debited from the sweep-in FD; you can continue to earn the same interest

Difference Between FD and RD

Unlike FDs, Recurring Deposits (RDs) allow you to invest a fixed amount every month for a certain tenor. See the table to understand how an RD differs from an FD.

Parameter

FD

RD

Frequency of Deposit

One-time Lump sum deposit

Every month

Tenor

7 Days – 10 Years

6 Months – 10 Years

Auto-renewal 

Yes

No

Minimum Deposit Amount

₹1,000

₹100

Interest Rate

Higher than RDs

Lower than FDs

Taxation of Fixed Deposits

The interest earned from an FD is taxable. Though this may not be the case for certain types of FDs. Check out a few essential facts related to tax implication:

  • Issuers cut Tax Deducted at Source (TDS) when crediting the interest to your account

  • TDS is deducted if the interest crosses the threshold of ₹40,000 in a financial year

  • TDS is only applicable to senior citizen FDs if the interest exceeds ₹50,000 in a fiscal

  • 10% TDS may be deducted on your interest earnings; this could be 20% if you fail to furnish PAN details

  • No TDS is deducted if your total income is below the minimum taxable amount

  • Senior citizens can submit Form 15H to avoid TDS deductions

  • Non-senior citizens must submit Form 15G

Risks and Limitations of FD

While FDs offer secure and guaranteed returns, there are certain risks involved. Factor in the below risks and limitations to avoid unpleasant surprises.

  • Check the issuer's credit rating to gauge the risk of defaulting on interest payments

  • Evaluate the inflation risk, as it could erode the value of your FD returns over time

  • Analyse whether the FD interest earned in a financial year exceeds the limit to avoid TDS

  • Choose a tenor that aligns with your financial goals and liquidity needs 

Conclusion

When booking an FD, consider your risk appetite, returns, time horizon, and goals. Compare different issuers on Bajaj Markets and calculate your earnings beforehand using an FD calculator. This helps you zero in on the best plan that allows you to accumulate a sizeable corpus over time.

Frequently Asked Questions

Can we open a fixed deposit without a bank account?

Yes, you can book an FD by submitting your ID and address proof documents. But this process may take longer.

How to open a fixed deposit account?

You can book an FD offline by visiting the issuer’s nearest branch. On Bajaj Markets, you can open a new account online in minutes.

How many fixed deposits can I have?

There is no limit on how many FDs you can open. You can book more than one FD with the same bank/NBFC.  

Which bank is safe for fixed deposits in India?

Since FDs are low-risk investments, you could book one at a bank or NBFC based on the interest rates offered.

What is a fixed deposit account?

Fixed deposits are an investment plan. You can begin investing by depositing a lump sum amount for a specific tenor at a fixed interest rate.

How to calculate FD interest?

You could use the simple interest or compound interest formula based on the tenor. Alternatively, you may use our  FD calculator to avoid manual calculations.

What is the maximum amount that I can invest in an FD?

Usually, there is no maximum limit on the FD investment. But issuers may set a minimum deposit criteria. On Bajaj Markets, you can book an FD starting at ₹1,000.

What is the primary difference between a savings account and an FD?

The distinguishing factor is liquidity. Savings accounts provide quick access to funds at lower interest rates. But certain FDs may lock-in funds for the tenor tenor at comparatively higher rates.

Can I close an FD before the tenor ends?

Certain issuers may permit early account closure depending on the FD type. 

What is the tenor for fixed deposit accounts?

FD tenors can vary between 7 days and 10 years. You can choose one based on the interest rate and your financial goals.

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