Earn interest up to 7.95% p.a. by investing in a Bajaj Finance Fixed Deposit | Rated CRISIL AAA/ STABLE and [ICRA]AAA(stable)

Fixed Deposits or FDs have remained one of the trusted and popular investment options in India. If you check the history of fixed deposit rates in India, you may not believe that there was a time when the bank FD interest rates were as high as 13%. The history of FD interest rates shows that it gradually decreased through the years. At that time, FDs were not considered the safest option in India but were the best investment plan for higher returns. 

 

While considering the last 20 years’ FD rates in India, you can find that the FD interest rates started a downhill journey. In 2003-04, it fell to 5.25%, which was a historical low in the fixed deposit interest rates. The historical FD rates in India have recorded higher interest rates during 1994-1999. Fixed Deposits offer greater flexibility and easier ways of liquidation compared to other investment options that have long lock-in periods. You can choose to invest in a fixed deposit through Bajaj Markets, which offers a platform for you to open an FD in trusted banks and NBFCs. 

Fixed Deposit Rates in Last 20 Years 

Previously we have discussed that the historical FD interest rates in India have been recorded during the period between 1994 and 1999. Let us check out the last 20 years’ FD rates in India to understand the course of changes and analyse the trends here. 

Year

Average Fixed Deposit Interest Rate (%)

1999 - 2000

10.00 - 10.50

2000 - 2001

9.50 - 10.00

2001 - 2002

8.00 - 8.50

2002 -2003

5.50 - 6.25

2003 - 2004

5.25 - 5.50

2004 - 2005

5.75 - 6.25

2005 - 2006

6.25 - 7.00

2006 - 2007

7.75 - 9.00

2007 - 2008

7.50 -9.00

2008 - 2009

7.75 - 8.50

2009 - 2010

6.50 - 7.50

2010 - 2011

8.25 - 8.75

2011 - 2012

    9.00 - 9.25

2012 - 2013

8.75 - 9.00

2013 - 2014

8.75 - 9.10

2014 - 2015

8.50 - 8.75

2015 - 2016

7.00 - 7.50

2016 - 2017

6.50 - 6.90

2017- 2018

6.25 - 6.70

2018 - 2019

6.25 - 7.25

2019 - 2020

5.70 - 6.40

2020 - 2021

5.25 - 5.35

2021 - 2022

5.05 - 5.35

Source: 

  1. https://www.rbi.org.in/scripts/PublicationsView.aspx?id=12765

  2. https://rbi.org.in/scripts/PublicationsView.aspx?id=17207

  3. https://www.rbi.org.in/scripts/PublicationsView.aspx?id=20469

 

Now, let us analyse the fixed deposit interest rates and find out how the FD interest rates changed in the last 20 years. Check out the graph depicted below to understand the change in FR rate trends.

 

 

If we analyse this chart, we can see a trendline showing a sharp decline in the fixed deposit interest rates. In the last 20 years, that is from 2000 to 2022, the average FD interest rate in India decreased from 10.50% to 5.35%. The financial market conditions, the RBI policies, and the country’s economic conditions accounted for this change.

 

As we know, even in this downhill, fixed deposits managed to offer one of the highest interest rates among the safest saving and investment options. 

History of Fixed Deposit in India

More than 75% of the Indian population comprises the middle-class or middle-income group. People belonging to this group have extremely low income left to save or invest after meeting all their liabilities. The shortage in disposable income favours risk-free investments like fixed deposits in the country. 

 

Until May 1985, the banks could set the fixed deposit interest rates as per their choice for the tenures between 15 days to a year. However, the upper limit was set at 8% per annum, and the banks cannot go above this ceiling. In 1985, this ceiling was removed. The fixed deposits underwent deregulation in India in 1992. After this, the FD interest rates were not assigned based on maturity. All FDs with a tenure of 46 days or above were now eligible to get a maximum of 13% interest rate.

 

In October 1997, RBI deregulated the FD interest rates completely. Following this, FD interest rates were no longer linked to the bank rates. Commercial banks were allowed to set FD interest rates and penalty over premature withdrawal of FD as per their discretion. As per today’s situation, banks have absolute freedom to fix their FD interest rates and offer guaranteed returns on investment.

Fixed Deposit Rates Today 

Let us take a look at the details of the FD interest rate offered by various banks in India. 


Banks


Interest Rate

State Bank of India

2.90% - 5.50%

Punjab National Bank

2.90% - 5.25%

HDFC Bank

2.50% - 5.60%

Axis Bank

2.50% - 5.75%

IDFC Bank

2.50% - 6.00%

Bank of India

2.85% - 5.05%

Canara Bank

2.90% - 5.75%

RBL Bank 

3.25% - 6.30%

Bank of Baroda

2.80% - 5.10%

*The interest rates mentioned here are valid as of 1st March, 2022, and it may be subject to change as per the bank's discretion. 

 

Now, let us take a look at the details of the FD interest rate offered by various NBFCs in India. 

NBFCs

Interest Rate 

Bajaj Finance

6.03% - 7.50%

Sundaram Finance

5.50% - 5.80%

LIC Housing Finance

5.15% - 6.00%

Muthoot Finance

6.25 - 7.25% 

*The interest rates mentioned here are valid as of 1st March 2022, and it may be subject to change as per the NBFC’s discretion. 

 

People above the age of 60 or senior citizens in India are offered an additional interest on fixed deposits. In the table below, you can find the per annum FD interest rates.


Banks


Interest Rate for Senior Citizens

State Bank of India

3.40% - 6.30%

Punjab National Bank

3.40% - 6.30%

HDFC Bank

3.00% - 6.35%

Axis Bank

2.50% - 6.50%

IDFC Bank

3.00% - 6.50%

Bank of India

3.35% - 5.55%

Canara Bank

2.90% - 6.25%

RBL Bank 

3.75% - 6.80%

Bank of Baroda

3.30% - 6.35%

*The interest rates mentioned here are valid as of 1st March, 2022, and it may be subject to change as per the bank's discretion. 


NBFCs


Interest Rate for Senior Citizens

Bajaj Finance

6.60% - 7.95%

Sundaram Finance

6.00% - 6.30%

LIC Housing Finance

5.40% - 6.25%

Muthoot Finance

6.75% - 7.75%

*The interest rates mentioned here are valid as of 1st March 2022, and it may be subject to change as per the NBFC’s discretion. 

 

You may be well versed in the history of fixed deposit rates in India now. Now, the query will be whom to trust and where to invest? Bajaj Markets is an exclusive online platform for all your financial needs. You can easily invest in an FD with any one of our partners and earn interest monthly, quarterly, half-yearly, or annually. Bajaj Markets will help you with the safe, secure, and stable investment option - a fixed deposit. 

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