1 Year FD Interest Rates

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

If you have a lump-sum amount of money and wish to park it in a risk-free short-term plan, 1-year FDs should be your top pick. Here are a few attractive features and benefits of such plans: 

• 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 FD interest rates 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. 

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. 

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