FD (Fixed Deposit)

Bajaj Finance		PNB Housing Finance		Mahindra Finance
Tenor (in months)	Interest rates (in p.a.)	Tenor (in months)	Interest rates (in p.a.)	Tenor (in months)	Interest rates (in p.a.)
12-14	7.40%	12-23	7.35%	12	7.40%
15-23	7.50%	24-35	7.00%	24	7.60%
24	7.55%	36-47	7.70%	36	7.70%
25-35	7.35%	48-59	7.40%	48	7.75%
36-60	7.65%	60-71	7.50%	60	7.75%
61-84	-	72-84	7.40%	61-84	-
120	-	120	7.40%	120	-

 

Interest Rates For Senior Citizens 

 

Other NBFCs

Interest Rates For Non-Senior Citizens

 

Interest Rates For Senior Citizens

 

Interest Rates For Non-Senior Citizens 

 

Interest Rates For Senior Citizens 

 

Types of Fixed Deposits

There are a number of fixed deposit schemes available in the Indian market. Here are the key features of some common fixed deposit schemes to help you choose the right one: 

1. Bank FDs 

A bank FD is a type of fixed deposit where you deposit a lump sum amount into a bank for a specified period of time. Your deposit earns interest based on the rate at the time you start your FD.

Banks are accredited financial institutions that are closely monitored by the RBI. So, you can rest assured that your savings are safe and sound. 

2. Company FDs 

Company FDs, also known as corporate FDs, are another popular FD option. A company FD is any fixed deposit that is offered by financial corporations and NBFCs. 

While saving with company FDs, it is crucial that you take into consideration CRISIL, ICRA and other credit ratings. They indicate the level of safety you can enjoy. Company FDs often offer competitive rates of return and flexible tenors. 

3. Post Office FD

Post Office fixed deposit, also known as post office term deposit, is one of the safest savings choices available in the Indian market. It is issued by Indian Postal Services. Additionally, it is backed by the sovereign guarantee of the Government of India.

4. Senior Citizens Fixed Deposit 

This fixed deposit is specially for senior citizens, i.e., those who are above the age of 60. Along with the benefits of a regular FD, senior citizens can avail of interest rates benefits of up to 0.50% with this FD. They usually serve post-retirement needs. 

5. Cumulative Fixed Deposit 

A subset of a regular fixed deposit, in this FD, your interest earnings are paid out at the time of maturity. The interest earned of the previous month/interest period is added to the investment amount. This compounding power enables you to maximise your returns.  

6. Non-Cumulative Fixed Deposit 

Like a cumulative FD, this is also a subset of a regular fixed deposit. However, the interest payout in this FD takes place at regular intervals instead of at maturity. As a result, the maturity amount is lower than that of a cumulative FD. 

With interest payouts at monthly, quarterly, half-yearly, or yearly frequency, this FD is great if you want regular income.

7. Tax Saver Fixed Deposit 

As the name suggests, this fixed deposit helps you save tax by enabling you to avail a tax deduction of up to ₹1.5 Lakhs. Here, you need to invest a one-time lump sum and the lock-in period is 5 years. During this time, you cannot withdraw funds to enjoy tax benefits.

8. Flexi Fixed Deposit 

This fixed deposit offers you dual benefits of a regular FD and that of a demand deposit. In this, your investment is linked to your savings accounts with the issuer. It offers higher interest rates and the liquidity of a savings account. 

9. NRE Fixed Deposit

This is another FD available for NRIs to invest in. However, unlike NRO FDs, the interest earnings from this FD are exempt from taxation. Moreover, you can entirely repatriate the interest and investment amount. The investment amount is, however, subject to fluctuation risk. 

10. NRO Fixed Deposit 

NRIs can invest in this Non-resident Ordinary FD account. You can invest in both, foreign and Indian currency, but the interest earnings are taxable as per the Income Tax Act. 

However, the interest earned can be repatriated entirely and even the investment amount can be repatriated to a certain limit. 

Features of a Fixed Deposit 

Fixed deposits are one of the best savings options available in the market, but what makes them so attractive? Read on to know more.

• Stable Returns: Since the rate of return of a fixed deposit is determined at the time of investment and are unaffected by market fluctuations, the returns are stable and secure.

• Flexible Tenors: FDs are generally offered for time horizons ranging from 7 days to 10 years. This makes them ideal for both short-term and long-term saving goals. You can choose your fixed deposit time period based on your financial objectives. 

• Attractive Interest Rates: Banks and NBFCs offer competitive rates for fixed deposits. Additionally, senior citizens can get up to 0.50% higher rates of return. 

• Minimal Deposit Amount: You can begin saving with FDs with a deposit amount as low as ₹1000. This makes them one of the most accessible savings options.

• Regular Payouts: Depending on your financial needs, you may choose to save with a non-cumulative fixed deposit. This allows you to get regular earnings for daily expenses or recurring financial commitments. 

• Auto-Renewal: Many banks and NBFCs offer auto-renewal options for fixed deposits.  This makes it extremely convenient for you to begin with and continue saving. 

• Tax Benefits: If your earnings from all fixed deposits with a bank is less than ₹40,000 in a year, you don’t have to worry about TDS. This limit is ₹50,000 for senior citizens. Investing in tax-saver FDs also allows you to get tax deductions. 

How to Invest in a Fixed Deposit

Starting a fixed deposit is a financial decision that requires some forethought. Here’s how you can begin saving with an FD: 

• Compare Prevailing FD Rates

Before making any saving decision, compare the prevailing interest rates offered by major banks and NBFCs. This ensures that you are well informed about existing rates of interest for FDs. This will ensure that you are able to choose an FD that maximises your returns. 

• Choose Preferred Tenor 

Another important step is to determine your preferred investment horizon. This depends on your financial priorities. Broadly speaking, for short-term saving goals, you should choose a short-term fixed deposit. 

However, if you’re in it for the long haul, consider choosing long-term FDs. They are a great option to grow your wealth in a risk-free way.

• Choose Preferred Payout Frequency

Depending on your financial needs and goals, you can choose between a cumulative and non-cumulative fixed deposit. When you save with a cumulative FD, your interest is compounded. Both the interest and the capital amount are paid out at maturity. 

 

However, with non-cumulative FDs, interest earned on your deposit is paid out at regular intervals as specified by you. 

• Choose Mode of Deposit

With the rise in online FDs, booking an FD has never been easier. You can choose to book an FD through an FD provider’s app or website. Alternatively, you can choose to visit the nearest branch of an FD provider and book an FD in person. 

Unique Variants of Fixed Deposit 

Issuers offer different variants of FDs to better suit your needs. While there may be some overlap in the features of such FD variants, the names are different and so are the key benefits. 

For example, Bajaj Finance, a Bajaj Markets partner, offers 3 unique variants that you can invest in. These variants are:

• Term Deposit: 

These are regular FDs with minimum investment amount of ₹15,000 and a flexible tenor of up to 60 months. You can receive interest payouts at a predetermined frequency (monthly, quarterly, half-yearly, yearly) or at maturity.

• Systematic Deposit Plan (SDP) – Monthly Maturity Scheme (MMS)

In this FD, you make monthly deposits of as low as ₹5,000 for a tenor of up to 60 months. The key difference from regular FDs is that the interest is by default paid out every month and the principal at maturity. 

Moreover, the interest earning for each monthly deposit is calculated based on the issuer’s prevailing FD rates of that month. This FD allows you to invest in instalments every month, and helps you build a disciplined savings habit. 

• SDP – Single Maturity Scheme (SMS)

Like SDP – MMS, in this scheme you make monthly deposits of at least ₹5,000 for a tenor of up to 60 months. The interest calculation for each deposit is the same as MMS, at prevailing FD rates. 

However, unlike the MMS variant, the interest and investment amount both are paid at maturity.

Steps to renew your FD Account

Renewal facility is offered when your fixed deposit account matures. With renewal, you can continue to earn returns. Some FD issuers offer an auto-renewal option at the time investment.

If you choose auto-renewal at the time of investment, the issuer will automatically renew your FD once it matures. 

However, if you have not and want to renew before maturity you can do so by following the steps given below:

• Visit Bajaj Markets

• Login to your account

• Navigate to the fixed deposit section

• Choose the FD you want to renew

• Check the terms and conditions (interest rate and tenor)

• Submit the request

Once you submit the request, your FD will be automatically renewed when it matures. Keep in mind that you will have to renew your FD  15 before your FD reaches maturity.

Why Should You Invest in a Fixed Deposit 

Before making any saving or investment decision, consider your financial goals and circumstances. Here are some reasons to invest in an FD:

• Low-risk Avenue

A fixed deposit scheme is one of the safest investment options available in the market as it is not subject to market fluctuations. Investing in an FD will ensure that your risk is diversified, helping you create a more well-rounded portfolio. 

• Guaranteed Returns 

As a safe investment option, fixed deposits ensure both safety of capital as well as returns. The interest rate on your FD is predetermined when you book an FD. 

This means that you will receive the said interest on your investment irrespective of any change in interest rates over your investment period. 

• Reliable Investment Option

A fixed deposit is one of the most dependable investment options available in the market. This is because you are well aware of the rate of return and investment horizon at the time of investing itself. 

You can time your FD with your goals or needs in mind. This way, it matures when you need funds. Thus, FDs allow you to plan your investment beforehand and offer reliable returns.

• Competitive Interest Rates 

You can choose from a wide range of banks and NBFCs that offer highly competitive rates of interest. This helps you maximise your returns. 

If you are a senior citizen, your returns can be even higher. Most banks and NBFCs offer up to a 0.50% higher rate of return for anyone over the age of 60. 

• Convenient Savings Option

With the option to book an FD online, fixed deposits have become one of the most convenient investment options available in the market today. 

With most banks and NBFCs, you can book an FD online, within a matter of minutes. Additionally, many banks and NBFCs give you the option to auto-renew your FD, which adds to your convenience. 

Key Things to Consider When Choosing a Fixed Deposit

It is imperative that you factor in your finances, goals and other factors while making any savings decision. Here are some important factors to consider before booking a fixed deposit:

1. Risk Appetite

Before making an investment, consider your risk tolerance levels. Your risk appetite is unique to you and your financial goals. 

A fixed deposit is a great financial instrument as it holds negligible risk and offers guaranteed returns. This makes them ideal for all kinds of investors. 

2. Time Horizon

Starting an FD account is ideal for both long-term and short-term investors as FD tenors can range anywhere from 7 days to 10 years. 

FDs are a great choice if you are looking to grow your money in a stable and steady manner for a long time. They offer guaranteed returns even if you want to park your excess funds on a short-term basis. 

3. Assured Returns

Interest rates on fixed deposits are predetermined and paid out as specified by you. This makes them an investment option you can rely on. 

If you are worried about economic downturns chipping away at your hard-earned money, FDs are a great savings option for you. This is because an FD is not affected by market fluctuations. So, you get the rate of return that you were assured at the time of booking. 

4. Financial Goals

If you require your invested capital in the immediate future, consider short-term FDs. They are an ideal way to park your funds safely while also generating assured returns. 

If you don’t have an immediate need for the invested amount, consider long-term FDs. They will generate higher rates of return while keeping your investment safe. 

If you require a regular source of income, consider investing in non-cumulative fixed deposits. They will give you interest payouts at a frequency you choose. Otherwise, consider a cumulative fixed deposit that will help you maximise your payout.

5. Safety of Capital

If your primary goal is to preserve your savings, then a fixed deposit may be the ideal option for you. When you save with an FD, your money grows at predetermined rates of return. This ensures that both your capital and returns are safe. 

Additionally, FDs are not subject to market fluctuations, which means your savings are safe regardless of market conditions. 

Who Should Invest in a Fixed Deposit?

FDs are one of the most versatile savings options available to Indian investors. Here is a comprehensive list of who should invest in an FD and why:

Stage 1 (18 to 31 years)

This is a diverse age group with varied financial goals and aspirations. If you are a part of this age group, it is likely that you have higher amounts of disposable income. This is since your financial responsibilities are usually at a minimum during this period. 

When you are around the ages of 18 and 31, you can use an FD to: 

• Build cash reserves and liquid emergency funds

• Fund short-term goals such as vacation plans, gadgets purchases, wedding plans, education plans, etc. 

• Diversify your portfolio as they offer a great hedge against market volatility

FDs may be the best choice for these needs as they bear low risk, offer assured returns and cultivate a saving habit. Additionally, many banks and NBFCs offer auto-renewal facilities which makes saving simple and effortless. 

Stage 2 (31 to 45 years)

During the ages of 31 to 45, it is highly likely that you have a family and higher levels of financial responsibilities. So, it becomes imperative that you begin saving diligently both for your dependents as well as for your retirement. 

During this period, it is not advisable to take too many risks with your hard-earned savings.  It may be wise to start saving with an FD that comes with lower levels of risk, guaranteed returns and tax benefits. 

When you are around the ages of 31 and 45, you can use an FD to:  

• Build both specific and generic emergency funds 

• Begin saving for retirement

• Start saving for your dependents’ future

Saving with an FD is a wise decision for you if you are between the ages of 31 and 45 as it assures both safety of the capital and returns. Additionally, you can enjoy tax benefits under Section 80C with a tax-saver FD.

Stage 3 (45 to 60 years)

During the ages of 45 to 60, it is likely that you have extensive financial needs and responsibilities. This is also the time when you should be saving aggressively for retirement and building a corpus that will sustain your golden years.

It is also crucial that you factor in medical and other kinds of emergencies into your saving goals and decisions. 

When you are around the ages of 45 to 60, you can use an FD to: 

• Build a corpus for retirement 

• Create extensive emergency funds 

• Create a regular source of income to stay financially independent

• Lower tax liabilities

An FD is a great savings tool for you if you are between the ages of 45 and 60 as this is not the time to take unwarranted risks with your finances. Additionally, FDs are extremely easy to book and renew. 

Stage 4 (60 years and above)

When you are above the age of 60, it is likely that a majority of your efforts are directed towards safeguarding your wealth. During this period, you may not want to take any risks with your money. 

 

FDs are a great savings option for this type of need as they not only assure safety of capital, but also generate decent returns on your savings. 

When you are 60 and older, you can use a fixed deposit to: 

• Generate regular income through interest payouts 

• Build emergency funds

• Save for your family 

A fixed deposit is ideal during your retirement as it is a simple, low-risk and comfortable way to save. It also helps you generate a regular source of income through the non-cumulative FD option.

Eligibility Criteria to Book a Fixed Deposit

Fixed Deposits let you save up for your financial needs and accumulate capital to attain future goals without hassles. Any individual/non-individual can book an FD due to its minimal requirements of age and deposit amount. 

In fact, even if you are a minor, and don’t meet the fixed deposit eligibility criteria, an adult can open an FD on your behalf. You are eligible to book an FD if you qualify under the following categories:

1. Individual

• An Indian Resident

• Individual of Indian Origin 

• Non-Resident Indian

2. Non-individual

• A Partnership Firm 

• A Hindu Undivided Family (HUF)

• A Sole Proprietorship 

• A Family Trust 

• An Association 

• A Club 

• A Society 

• A Company

Documents Required to Book a Fixed Deposit 

To open an FD account, you need to submit certain documents of address and identity proof. Issuers use these to ascertain your credibility.

The documents vary based on the category you fall in. Here are the documents required for opening a fixed deposit account if you are an individual: 

1. Identity Proof Documents

• Voter ID 

• PAN Card

• Driving Licence 

• Passport

• Aadhaar Card 

• Ration Card 

• Latest passport size photograph 

• Senior Citizen ID Card

2. Address Proof Documents

• Electricity bill 

• Passport

• Telephone bill 

• Bank statement with a cheque 

• Post Office issued certificate or ID card

• Other utility bills 

3. Documents Required for a Public/Private Limited Company to Invest in an FD

If you are a Public/Private Limited Company, you will need to provide the following FD documents to invest in an FD:  

• Certificate of Registration 

• Resolution from the power of attorney and the Board of Directors 

• Certificate of Incorporation 

• Company Permanent Account Number

• Memorandum and Articles of Association

• Address and identity proof of the authorised signatories

• Specimen signatures of the authorised individuals

• Statement of bank account 

• Recent electricity/telephone bill

4. Documents Required for a Partnership Firm to Invest in an FD 

If you are a Partnership Firm, you will have to submit the FD documents mentioned below to invest in an FD: 

• Deed of Partnership 

• PAN Card

• Certificate of Registration 

• Identity and address proof of the authorised signatories 

• List of the authorised signatories

5. Documents Required for a Hindu Undivided Family (HUF) to Book an FD 

If you are a Hindu Undivided Family (HUF), you will need to submit the documents for fixed deposit as mentioned below:  

• Deed and Declaration of the HUF

• Address and identity proof of the Karta of the HUF

• PAN Card

• Bank statement of the HUF

6. Documents Required for a Statutory Body/Local Authority to Invest in an FD

If you are a statutory body or a local authority, you can invest in an FD by submitting the following documents: 

• PAN Card 

• Latest electricity/telephone bill 

• Bank account statement 

• Certificate of Incorporation 

• KYC of the authorised signatories 

• Certificate of Registration

• Copy of the permission letter from the respective ministry or government authority 

7. Documents Required for Registered Societies to Book an FD

If you are a registered society, you can book an FD by submitting the documents mentioned below:

• PAN Card

• Recent telephone or electricity bill 

• Statement of bank account

• Memorandum and Articles of Association 

• Copy of the by-laws of the society 

• Copy of Resolution from the Board of Directors for the authorisation of the FD account

• Certificate of Incorporation/ Registration

• Address and Identity proof of the authorised signatories 

• Specimen signatures of the authorised individuals

8. Important Things to Note While Submitting Documents to Book an FD 

You need to be mindful about certain aspects when you submit your FD documents. Here are a few pointers: 

• You must always submit original documents along with their photocopies for verification

• If you fill out the application form offline, make sure to always write in capital letters and use a black pen

• Always remember to countersign if you overwrite

• Utilise the nomination facility provided

• Provide your permanent address as well as your contact number

Taxation on Fixed Deposit

When you invest in a tax-saving fixed deposit, you can deduct up to ₹1.5 Lakhs from your taxable income under Section 80C. However, the interest income you earn on the fixed deposit is taxable as per your tax bracket.

If your interest income from all fixed deposits with a bank less than ₹40,000 (₹50,000 for senior citizens) in a year, there is no TDS deduction.

In case your interest income is beyond this threshold, your bank will deduct TDS at 10% when your PAN is linked to your bank account. When your PAN is not linked to your bank account, TDS is deducted at 20%. 

Lock-in Period in an FD 

The lock-in period of any investment, including fixed deposits, refers to the period during which you cannot access or withdraw your investment. Generally, the lock-in period for FDs is the same as the investment tenor. However, this may vary.

The variation in FD lock-in period depends on the type of FD you have invested in and on the FD issuer. In tax-saving FD specifically, the lock-in period is 5 years. You cannot withdraw funds before 5 years.

Generally, premature withdrawal is available in other FDs, but may attract a penalty. So, thoroughly check all the investment terms beforehand to avoid being blindsided.

Loan Against FD 

To promote continuity of investment and discourage premature withdrawal, FD issuers offer a loan against FD. With this facility, you can avail of credit at a competitive interest rate. During this time, you can keep your FD intact to earn continued returns. 

The loan amount depends on your investment amount and on the issuer’s policy. Generally, FD issuers may offer a loan against FD for up to 90% of the deposit value. For example, with an FD of ₹1 Lakh, you may get a loan of up to ₹90,000. 

Keep in mind that the tenor of the loan you avail against FD is generally the same as the remaining tenor of the FD. This means with a 6-year FD that started 5 years ago, the loan tenure may only be up to 1 year. 

So, make that you check and assess all the terms and conditions of availing a loan against your FD. 

FD Maturity Amount

In simple terms, the FD maturity amount is the amount you receive when the tenor of your FD ends. This includes your investment amount (principal) and your interest earnings on the principal amount. 

The maturity amount is based on a few factors – FD interest rates, FD type, and your chosen tenor. While you can calculate the maturity amount manually, you can also do it through an FD calculator. 

This digital calculator gives you an accurate estimate of your returns. The estimate is based on the interest rate, FD type, and tenor you choose. Knowing your FD maturity amount beforehand can help you better optimise your investment and maximise your returns. 

At Bajaj Markets, you can find the best FD offers and use the free online calculator to assess and optimise your investment easily.