Fixed deposits (FD) are one of the most popular savings instruments in India that let you deposit money into a bank or NBFC for a specified period of time which grows at a fixed rate of return. FDs are a great way to save money for both long and short-term financial needs. FDs are an especially great way to save, as they bear little to no risk as returns are predetermined and not affected by market fluctuations.
Bajaj Finance is one of the most trusted NBFCs with credit ratings of AAA from CRISIL and a rating of AAA from ICRA. Additionally, you can get secured returns up to 8.10% p.a. which would help you maximise your returns.
PNB Housing Finance’s FD offering is rated an AA from credit rating agencies such as CRISIL and CARE making it a creditworthy FD provider. You can earn interests of up to 7.55% on your FD and senior citizens can get 0.25% higher rates of return.
Mahindra Finance, one of the leading NBFCs in India has a credit rating of F AAA/Stable. This makes the NBFC one of the most reliable FD providers in India. You can also earn attractive interest rates of up to 7.75% and senior citizens can get 0.25% higher rates of return.
Here are the interest rates offered by our partners on FDs.
Interest Rates - Non-senior Citizens
Interest Rates - Senior Citizens
PNB Housing Finance
The figures indicated above are accurate as of 20th January 2023.
Fixed deposits are one of the best savings options available in the market, let’s look at some features of an FD to help you get a better understanding of what makes FDs such an attractive savings option.
Assured Returns: Since the rate of return of a fixed deposit is determined at the time of investment, your return on investment is guaranteed. Additionally, this predetermined rate of return is not subject to market fluctuations, making your investment free from any major risks.
Flexible Tenors: FDs are generally offered for time horizons ranging from 7 days to 10 years, making them ideal for both short-term and long-term saving goals. You can choose your fixed deposit time period based on your financial goals.
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, making it one of the most accessible savings options.
Regular Payouts: Depending on your financial needs, you may also choose to save with a non-cumulative fixed deposit which would give you regular interest payouts.
Auto-Renewal: Many banks and NBFCs offer auto-renewal options for fixed deposits which makes it extremely convenient for you to begin with, as well as continue saving.
Tax Benefits: If your interest income from all fixed deposits with a bank is less than ₹ 40,000 (₹50,000 for senior citizens) in a year, you don’t have to pay any TDS.
Any kind of saving decision should be well-thought-out and should take into consideration your financial goals and circumstances. Here are some reasons to keep in an FD:
A fixed deposit scheme is one of the safest investment options available in the market as it’s not subject to market fluctuations. Investing in an FD will ensure that your risk is diversified, helping you create a more well-rounded portfolio.
Being 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 said the interest rate on your investment irrespective of any change in interest rates over your investment period.
A fixed deposit is one of the most reliable investment options available in the market as you are well aware of the rate of return and investment time horizon at the time of investment itself. If you have a requirement for the saved amount within a given period of time, FDs are a great savings option as your FD tenor can be chosen depending on your requirements.
If you’re looking to make an investment in fixed deposits, you can choose from a wide range of banks and NBFCs that offer highly competitive rates of interest, which will help you maximise your returns. If you’re a senior citizen, your returns can be even higher as most banks and NBFCs offer up to a 0.50% higher rate of return for anyone over the age of 60.
With the rise in online FD bookings, 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 makes saving seamless.
It's imperative that you factor in your financial circumstances, goals and other factors while making any savings decisions. Here are some important factors to consider before booking a fixed deposit:
Before making an investment, you should always take into consideration your risk tolerance levels. Your risk appetite is unique to you and your financial goals. Fixed deposits are a great financial instrument as it holds negligible risk and offers guaranteed returns, making them ideal for all kinds of investors.
An FD account is great for both long-term and short-term investors as FD tenors can range anywhere from 7 days to 10 years. So, whether you’re looking to grow your money in a stable and steady manner for a long time or just looking to park your excess funds on a short-term basis in a risk-free savings option that guarantees returns, FDs are a great choice.
If you’re someone that’s looking for guaranteed returns on your investment, a fixed deposit might be an ideal choice for you as interest rates on your fixed deposits are predetermined and paid out as specified by you. If you’re worried about certain inevitable economic downturns eating away at your hard-earned money, FDs are a great savings option for you. This is because, unlike most other savings and investment instruments, an FD is not affected by market fluctuations, meaning you get the rate of return that you were assured at the time of savings regardless of market conditions.
Another important factor to consider when making an FD investment is your financial goals. If you require the invested capital in the immediate future, consider short-term FDs as a way to park your funds safely while also generating assured returns. However, if you don’t have an immediate need for the invested amount, consider a long-term FD that will generate higher rates of return while keeping your investment safe. Additionally, if you require a regular source of income, consider investing in a non-cumulative fixed deposit that will give you interest payouts as specified by you. Otherwise, consider a cumulative fixed deposit that will help you maximise your fixed deposit investments.
If your primary goal with your savings is to preserve it and ensure that it’s not eaten away due to market fluctuations, then a fixed deposit might be the ideal savings option for you. This is because when you save with an FD, your money grows at predetermined rates of return, which 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.
Saving in a fixed deposit is a financial decision that requires a lot of forethought and analysis. Here’s how you can begin saving in an FD:
Before making any saving decision, compare and contrast prevailing interest rates in major banks and NBFCs. This is an important exercise while making any investment decision as comparing and contrasting ensures that you’re well-informed about existing rates of interest for FDs. This will ensure that you are able to choose an FD option that maximises your returns.
Another important step when making any savings decision is to determine your preferred tenor. This would depend on your financial priorities. Broadly speaking, if you’re someone that has short-term saving goals, you should choose a short-term fixed deposit. However, if you’re in it for the long haul, you should consider choosing long-term FDs. They are a great option for both long-term and short-term savers as the tenor for FD ranges from 7 days to 10 years.
Depending on your financial needs and goals, you can choose between a cumulative and non-cumulative fixed deposit option. When you save with a cumulative FD, your interest is accrued and 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 (monthly, quarterly or yearly) as specified by you.
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 also choose to visit the nearest branch of an FD provider and book an FD in person.
There are a number of fixed deposit schemes available in the Indian market. Let’s look at the key features of some common fixed deposit schemes to help you decide which one(s) you should choose:
A bank FD is a type of fixed deposit wherein you deposit a lump sum amount into a bank for a specified period of time at a fixed interest rate. Since banks are typically accredited financial institutions that are closely monitored by the RBI, you can rest assured that your savings are safe and sound.
Company FDs, also known as corporate FDs are another popular FD option available in the market. A company FD is any fixed deposit that’s offered by financial corporations and NBFCs. While saving with company FDs, it’s crucial that you take into consideration CRISIL, ICRA and other credit ratings as they are an important indicator of the NBFC’s creditworthiness. Company FDs often offer competitive rates of return and flexible tenors.
Post Office fixed deposit, also known as post office term deposit is one of the safest savings choices available in the Indian market as it’s issued by Indian Postal Services. Additionally, it is also backed by the sovereign guarantee of the government of India.
FDs are one of the most versatile savings options available to Indian investors. Here’s a comprehensive list of who should invest in an FD and why:
This is a diverse age group that has varied financial goals and aspirations. If you are a part of this age group, it’s likely that you have higher amounts of disposable income as your financial responsibilities are at its lowest during this period. When you’re around the ages of 18 and 31, you can use an FD to:
build cash reserves and liquid emergency funds
fund short-term saving goals such as vacation plans, plans to buy gadgets, wedding plans, education plans, etc.
diversify your portfolio as they offer a great hedge against market volatility
An FD might be the best saving choice for these needs as it bears lower risk, offers assured returns and cultivates a saving habit. Additionally, many banks and NBFCs also offer auto-renewal facilities for your FD which makes saving simple and effortless.
During the ages of 31 to 45, it’s highly likely that you have a family and higher levels of financial responsibilities. Hence, it becomes imperative that you begin saving diligently both for your dependents as well as for your retirement. During this period, it’s not advisable to take many risks with your hard earned savings and it might be wise to start saving into an FD that comes with lower levels of risk, guaranteed returns and incredible tax benefits. When you’re 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 people between the ages of 31 and 45 as it assures both safety of the capital and returns. Additionally, by saving with an FD, you can enjoy tax benefits under Section 80C.
During the ages of 45 to 60, it’s 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 you during retirement period. It is also crucial that you factor in medical and other kinds of emergencies into your saving goals and decisions. When you’re 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 help you achieve financial independence
lower tax liabilities
An FD is a great savings tool for people between the ages of 45 and 60 as they cannot afford to take unwarranted risks with their money. Additionally, FDs are extremely easy to book and renew, which makes savings simple and seamless.
When you’re above the age of 60, it’s likely that a majority of your efforts are directed towards safeguarding your wealth. During this period, you might not want to take any risks with your money. FDs are a great savings option for this type of need as not only does it assure safety of capital, it also generates decent returns on your savings. When you’re 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 a great way to save during your retirement period as it is a simple, low-risk and comfortable way to save. It also helps you generate a regular source of income through a non-cumulative FD.
Fixed Deposits are financial instruments that let you save up for your financial needs and accumulate capital to attain future goals without much hassle. 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 behalf of you.
You are eligible to book an FD if you qualify under the following categories:
An Indian Resident
Individual of Indian Origin
A Partnership Firm
A Hindu Undivided Family (HUF)
A Sole Proprietorship
A Family Trust
Opening an FD account includes the submission of certain documents of address and identity proof to ascertain your credibility which is part of the vital requirements for a fixed deposit account. Based on the aforementioned categories that you could identify yourself in, you can learn more about the documents required for fixed deposits.
Here are the documents required for opening a fixed deposit account if you are an individual :
Identity Proof Documents
Latest passport size photograph
Senior Citizen ID Card
Address Proof Documents
Bank statement with a cheque
Post Office issued certificate or ID card
Other utility bills
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
If you are a Partnership Firm, you will have to submit the FD documents mentioned below to invest in an FD:
Deed of Partnership
Certificate of Registration
Identity and address proof of the authorised signatories
List of the authorised signatories
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
Bank statement of the HUF
If you are a statutory body or a local authority, you can invest in an FD by submitting the following FD documents:
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
If you are a registered society, you can book an FD by submitting the FD documents mentioned below:
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
You need to be mindful about certain aspects when you submit your FD documents. Here’s what you need to keep in mind while submitting your FD documents:
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.
When you invest in a fixed deposit, you can deduct up to ₹1.5 Lakh from your taxable income under Section 80C. However, it is important to note that the interest income earned on the fixed deposit is taxable as per your tax bracket.
If your interest income from all fixed deposits with a bank is less than ₹40,000 (₹50,000 for senior citizens) in a year, the bank cannot deduct any TDS. 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 and TDS at20% when your PAN is not linked to your bank account.
A fixed deposit is an investment and savings instrument wherein you deposit your money in a bank or NBFC for a specified period at a fixed interest rate. It is one of the safest investment options as fixed deposits are not affected by market fluctuations, hence, your deposit amount will generate predetermined returns.
When your FD matures, you have two options- you can either choose to withdraw your investment or you may choose to renew your FD investment.
Yes, you can either choose to withdraw or renew your FD at maturity.
An FD is a great investment vehicle for anyone looking for safe investment options that offer predictable and consistent returns.
The right fixed deposit for you is one that takes into account all your financial needs and goals. There are a wide variety of FDs available in the market that cater to different types of investors.
The minimum and maximum deposit amount for a fixed deposit will vary based on your fixed deposit account and your banking partner. However, generally, the minimum deposit amount can be as low as ₹1,000 in many banks with no cap on the maximum deposit amount.
Yes, you can get a monthly interest payout on your FD by booking a non-cumulative fixed deposit.
You can invest in an FD by booking an FD at your preferred bank or NBFC.
A fixed deposit is a great investment option as it comes with negligible risk and offers assured returns. Other benefits of investing in an FD include tax benefits, loan against FDs and regular source of income.
Typically, the investment tenor for fixed deposits range from 7 days to 10 years.
You can get maximum returns on your fixed deposits by investing in a cumulative fixed deposit that reinvests the interest income through the investment tenor causing your investment to compound exponentially. Additionally, you can also choose to invest in a tax-saving fixed deposit which will give you added tax benefits.
Fixed deposits are relatively risk-free as they are not affected by market fluctuations. The return on your investment and investment time horizon are also predetermined, which ensures safety of both initial capital and the interest gained.
The documents required for an FD depends on the category you fall under. If you are an individual, you will need to submit the proof of your identity and address. If you are a non-individual, you would have to provide FD documents such as copy of by-laws, bank statements, utility bills, memorandum and articles of association, certificate of incorporation/registration, KYC and specimen signatures of authorised signatories, copies of the deed, permission letter and the resolution.
As a minor you cannot open your own FD account. A guardian would have to open the account in your name and you will receive the amount when you turn 18 or when the FD matures.
A memorandum of association is a legal document signed by the inceptive shareowners and warrantors of the company/association. The articles of association is a document that contains the rules to run the association/company agreed upon by its members. These FD documents hold great value since they are indispensable and can provide authenticity to the respective organisation.
Yes, you can submit your Aadhar Card as a part of the FD documents for address proof since it is a government mandated document that is acceptable both as a proof of identity as well as a proof of address.
No, there is no capping on the maximum age to book an FD. Although there is a minimum deposit amount suggested to invest in an FD. Additionally, if you happen to be a minor, an adult can book an FD on your behalf.
Registered societies are liable to pay a monthly maintenance fee that is used to cover charges such as municipal taxes and others. The surplus amount left behind is invested in an FD.