Comparing 1-Year Fixed Deposit Interest Rates

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Fixed deposits are ideal investments for those who wish to earn interest on their savings without having to weather market risks and fluctuations. Under this risk-free investment avenue, you deposit a lump-sum amount for a predetermined tenor and earn guaranteed returns once the term ends. You can lock in this amount for anywhere between 7 days to 10 years and earn guaranteed returns based on the outstanding rate at which the investment was made.

If a short-term investment goal is on your horizon, you will likely find the 1-year FD tenor more attractive than the others. While different NBFCs and banks offer different 1-year FD interest rates, most range from 5%-7%. For senior citizens, this base 1-year FD interest rate comes slightly padded. You can claim this interest either at the end of the maturity tenor or opt for a monthly, quarterly or half-yearly payout structure. You can use the Fixed Deposit calculator to find out how much your investments shall make for a specific tenor. Enter the amount that you wish to invest, the tenor you would like to remain invested, and rate of interest. The calculator will compute the maturity amount in an instant. This will help you make better decisions when it comes to FDs.

Features & Benefits of a 1-Year Fixed Deposit

Nominal Deposit Amount

Most banks and NBFCs allow you to book a one-year FD with a nominal amount of just ₹1,000. Since 1-year <a href="https://www.bajajfinservmarkets.in/fixed-deposit/fd-interest-rates-and-processing-fees.html">FD interest rates</a> are quite attractive, you can reap sizable benefits on the amount by investing it for a brief 12-month window. Thus, if you’ve just started working or are a risk-averse investor looking for safe investment opportunities, you can opt for a 1-year FD.

Assured Returns

Since returns from a fixed deposit don’t depend on market performance, you will receive the returns specified at the beginning of the tenor. In other words, FD(one-year) interest rates remain unchanged during the lock-in period. Thus, you will be entitled to the lock-in interest on your investment, no matter the market situation when the plan matures.

Better Returns than Savings Accounts

Keeping your money in savings accounts will protect it from market fluctuations, but at the same time, it will also hamper your returns. Fixed deposit rates for 1-year tend to be significantly higher than those offered by regular savings accounts - with senior citizens enjoying the highest FD rates for 1-year. Thus, these investment instruments provide the same safety net for your savings without compromising on your returns.

No Risk Investments

1-year FDs ensure that you can protect your savings from market volatility and earn good returns. This helps balance your portfolio while also allowing you to grow your savings. Moreover, since FD one-year interest rates are quite competitive, you won't be trading in low returns for safety.

Liquidity Benefits

While a 5-year FD will earn you better interest than a 1-year FD plan, you might have to pay higher penalties on premature withdrawals for such plans. If you’re likely to need the deposited funds within the next 12 months, opting for a 1-year FD would be better. You can place a simple premature withdrawal request and collect your deposit at any time before the lapse of the tenor. Usually, this results in a 1% reduction on the stated 1-year FD interest rate -as a penalty for the early withdrawal.

Payout Flexibility

You can either opt for a cumulative fixed payout option or a non-cumulative variable payout plan. With a non-cumulative 1-year FD, you can reap return benefits on a monthly, quarterly or half-yearly basis. The interest earned on your principal amount will automatically get credited to your savings account.

List of NBFCs FD Interest Rates for 1-year Tenor

PNB Housing Finance

Fixed deposits offered by PNB Housing Finance have secured a FAA+/Negative rating (by CRISIL) and a AA/Stable rating (by Care). The minimum deposit slab for all PNB Housing 1-year FD is set at ₹10,000. However, the minimum deposit requirement for a monthly payment FD is capped at ₹25,000. Each PNB Housing Finance FD comes with a 3-month lock-in period, after which you can easily liquidate the deposit and withdraw the deposited amount. However, you will then be entitled to a lower ROI than the initially agreed-upon figure.

PNB Housing Finance FDs	Cumulative	Monthly	Quarterly	Half-Yearly	Annually
1-Year FD Interest Rate for Regular Citizens	7.45%	7.11%	7.25%	7.32%	7.45%
1-Year FD Interest Rate for Senior Citizens	7.75%	7.51%	7.55%	7.62%	7.75%

Note: The above mentioned interest rates are indicative and are subject to change as per the company’s discretion and policies.

Mahindra Finance

Under its Samruddhi fixed deposit plan, Mahindra Finance offers both cumulative and non-cumulative 1-year FD plans. The minimum deposit amount for the cumulative plan stands at ₹5,000, while the non-cumulative option comes with a minimum deposit requirement of ₹25,000. This investment is designed for deposits under ₹1 Crore and offers a base 1-year FD interest rate of 7.40%. Additionally, Mahindra Finance employees and family members get a 0.35% hike on this base rate. The AAA/Stable credit rating of this NBFC makes it a trust-worthy choice for FD investors.

Mahindra Finance FDs	Cumulative	Monthly	Quarterly	Half-Yearly	Annually
1-Year FD Interest Rate for Regular Citizens	7.40%	7.05%	7.10%	7.15%	7.40%
1-Year FD Interest Rate for Senior Citizens	7.65%	7.30%	7.35%	7.40%	7.65%

Note: The above mentioned interest rates are indicative and are subject to change as per the company’s discretion and policies.

Bajaj Finance

Bajaj Finance offers one of the highest FD interest rates for a 1-year deposit. For both cumulative and non-cumulative 1-year FD plans, citizens under 60 years can enjoy an interest rate of 7.40% p.a. Senior citizens get a 0.25% hike on this base 1-year FD interest rate. These rates are valid for deposits up to ₹5 Crores. Bajaj Finance allows you to start an FD with just ₹15,000 and pick a comfortable payout frequency to suit your needs.

Bajaj Finance FDs	Cumulative	Monthly	Quarterly	Half-Yearly	Annually
1-Year FD Interest Rate for Regular Citizens	7.40%	7.16%	7.20%	7.27%	7.40%
1-Year FD Interest Rate for Senior Citizens	7.65%	7.39%	7.44%	7.51%	7.65%

Note: ROI w.e.f 8.60%. The interest rates are subject to change as per the company’s discretion and policies.

Top Banks FD Interest Rates With a 1-year Tenor

Here’s a list of 1-year FD interest rates offered by top banks in the country for deposits under the ₹2 Crores slab:

Name of Bank	1-Year FD Interest Rate for Regular Citizens p.a.*	1-Year FD Interest Rates for Senior Citizens p.a.
YES Bank	6.75%	7.25%
AU Small Finance Bank	7.50%	8.00%
IDBI Bank	5.70%	6.20%
SBI Bank	5.60%	6.10%
Canara Bank	6.50%	7.0%
IDFC First Bank	6.25%	6.75%
Bank of India	5.50%	6.0%
Punjab National Bank	5.50%	6.0%

Why to Invest in a 1-year Tenor FD?

If you’re wondering why you should invest in a 1-year FD, here’s a list of reasons that’ll help convince you:

Investing in a short-term 1-year FD will allow you to earn decent returns while keeping your money safe from market fluctuations. 1-year FD interest rates are quite attractive and can help you earn much better returns as compared to the returns from a regular savings account.
A 1-year FD is perfect for those chasing short-term financial goals, like buying a bike or saving-up for a holiday.
Opting for a long-term FD will mean locking in your deposit for a set interest rate for a long duration. Thus, you can reap the benefits of higher interest, even if rates rise after a few months. However, with a 1-year FD, you can take the matured amount and reinvest it in a new FD after the year-long tenor.
1-year FDs are ideal for those who are trying to foray into the world of investment but wish to side-step the risks associated with a market-linked investment.
Liquidity penalties for 1-year FDs are lower than those levied on 3 to 5-year plans. This makes them better options for those who might need to withdraw the deposited amount before the lapse of the term.
You can diversify your investment portfolio with a healthy mix of such risk-free investment plans.

Disclaimer

The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial investment advice or endorsement of any sort.

The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products.

Can I book an FD for 1 year?

Yes. Most banks and NBFCs have 1-year FD plans that offer attractive rates of interest. You can apply for a 1-year FD online or by visiting a physical bank branch.

What is the interest that can be earned on an FD worth ₹1 Lakh for 1 year?

The total interest accrued on a principal of ₹1 Lakh will depend on the ROI offered by your selected bank or NBFC. For instance, Bajaj Finance offers regular citizens a 1-year FD interest rate of 6.55%. Thus, on a sum of ₹1 Lakh, you will earn ₹6,550 (p.a.), making you eligible for a total payout of ₹1,06,550 at the end of the tenor.

Which bank is best for 1-year FD?

Utkarsh Small Finance Bank offers the highest 1-year FD interest rates of 6.90% p.a. (regular citizens) and 7.40% p.a. (senior citizens). This makes it the best bank for a 1-year FD plan.

Should I invest in a 1-year FD or RD plan?

While both FDs and RDs are great risk-free investment options, the former offers higher interest rates than the latter, making it the more profitable short-term option. Moreover, with an FD, you can enjoy an assured monthly income from the investment, while an RD locks in the principal and interest until the maturity date. If you’re an employed individual looking to cultivate a savings habit, opt for an RD. However, if you have surplus sums, you should invest the same in a 1-year FD plan.

Can I pick a payout frequency for my 1-year FD plan?

Yes. Most banks and non-banking financial companies offer cumulative and non-cumulative 1-year FD plans. Under the non-cumulative plan, you can choose from monthly, quarterly, half-yearly or annual (maturity) payout options.

Can I withdraw my 1-year FD before the end of its tenor?

Yes. You can withdraw your 1-year FD before the lapse of its 12-month tenor. Most banks and NBFCs will have a set lock-in period - usually three months - after which you can withdraw the amount. However, doing so will attract a penalty in the form of a lowered 1-year FD interest rate.

What is the minimum deposit amount for a 1-year FD?

The minimum deposit requirement for a 1-year FD plan will vary from one bank/NBFC to another. However, most top institutions offer great 1-year FD interest rates on investments starting from just ₹1,000.

What happens if the 1-year FD interest rates change after I invest in a plan?

Once you’ve deposited your lump-sum amount into an FD investment, it becomes immune to any changes to the FD interest rates. In other words, your returns will be calculated on the ROI prevailing at the time the deposit was locked-in.