Fixed Deposits have remained one of the most 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 rates had also dropped significantly to a historical low of 5.75% in 2003-04 from 9.50%-10.00% in 2000-01. Since then, the fixed deposit rates in India have somewhat recovered but still fail to reach par with high rates that prevailed during 1994-1999.
The table below indicates the course of FD interest rates over the the last 20 years in India -
Year |
Average Fixed Deposit Interest Rate (% p.a.) |
2022-2023* |
5.35-5.90 |
2021 – 2022 |
5.05 - 5.35 |
2020 – 2021 |
5.25 - 5.35 |
2019 – 2020 |
5.70 - 6.40 |
2018 – 2019 |
6.25 - 7.25 |
2017- 2018 |
6.25 - 6.70 |
2016 – 2017 |
6.50 - 6.90 |
2015 – 2016 |
7.00 - 7.50 |
2014 – 2015 |
8.50 - 8.75 |
2013 – 2014 |
8.75 - 9.10 |
2012 – 2013 |
8.75 - 9.00 |
2011 – 2012 |
9.00 - 9.25 |
2010 – 2011 |
8.25 - 8.75 |
2009 – 2010 |
6.50 - 7.50 |
2008 – 2009 |
7.75 - 8.50 |
2007 – 2008 |
7.50 -9.00 |
2006 – 2007 |
7.75 - 9.00 |
2005 – 2006 |
6.25 - 7.00 |
2004 – 2005 |
5.75 - 6.25 |
2003 – 2004 |
5.25 - 5.50 |
2002 -2003 |
5.50 - 6.25 |
2001 – 2002 |
8.00 - 8.50 |
2000 – 2001 |
9.50 - 10.00 |
1999 – 2000 |
10.0 - 10.50
|
*The average fixed deposit rate for 2022-23 is based on the data available as of August 19, 2022
Source:
https://www.rbi.org.in/scripts/PublicationsView.aspx?id=12765
https://rbi.org.in/scripts/PublicationsView.aspx?id=17207
https://www.rbi.org.in/scripts/PublicationsView.aspx?id=20469
https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/64T_1509202299CF74062C2F41D693412F3EAAE4A649.PDF
Now, let us analyse the fixed deposit interest rates and find out how the fixed deposit interest rates have changed in the last 20 years. Check out the graph depicted below to understand the change in FD 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 2023, the average interest rate in India dropped from 10.50% to 5.90%.
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.
More than 31% 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 the mid-1980s, the banks could set fixed deposit interest rates as per their choice for tenors between 15 days to a year. However, the upper limit was set at 8% per annum, and the banks could not go above this ceiling. In the mid-1980s, this ceiling was removed.
The fixed deposits underwent some degree of deregulation in India in 1992. This was when the RBI introduced a ceiling of 13% interest rate for all fixed deposits with a tenor of over 46 days.
In October 1997, RBI took further steps to deregulate these rates, following which the interest rates were no longer linked to the bank rates. Commercial banks were allowed to set interest rates and penalties over the premature withdrawal of FD at their discretion.
Today, banks have the freedom to fix their interest rates and offer guaranteed returns on your investment. You can use the online FD calculator to determine the interest that you would be earning on your investment to make better financial decisions.
Let us take a look at the details of the interest rates on fixed deposits offered by various banks in India.
Banks |
Interest Rate (p.a.) |
3.00% - 7.10% |
|
3.50% - 7.25% |
|
3.00% - 7.25% |
|
3.50% - 7.10% |
|
3.50% - 7.75% |
|
3.00% - 7.00% |
|
4.00% - 7.25% |
|
3.50% - 7.80% |
|
3.00% - 7.25% |
|
3.25% - 7.75% |
|
3.75% - 8.00% |
*The interest rates mentioned here are valid as of September 25, 2023, and they may be subject to change at the bank's discretion.
Now, let us take a look at the details of the interest rates offered by various NBFCs in India.
NBFCs |
Interest Rate (p.a.) |
7.11% - 8.35% |
|
6.79% - 7.85% |
|
7.05% - 8.05% |
|
Sundaram Finance |
7.45% - 7.90% |
LIC Housing Finance |
7.00% - 7.50%` |
*The interest rates mentioned here are valid as of July 07, 2023, and they may be subject to change at the NBFC’s discretion.
People above the age of 60 or senior citizens in India are offered additional interest on fixed deposits. The FD interest rates for senior citizens are mentioned below -
Banks |
Senior Citizens (p.a.) |
State Bank of India |
3.50% - 7.60% |
Punjab National Bank |
4.00% - 7.75% |
HDFC Bank |
3.50% - 7.75% |
Axis Bank |
5.00% - 8.00% |
IDFC Bank |
4.00% - 8.00% |
Bank of India |
3.25% - 7.25% |
Canara Bank |
3.25% - 7.65% |
RBL Bank |
4.00% - 8.30% |
Bank of Baroda |
3.50% - 7.75% |
YES Bank |
3.75% - 8.25% |
AU Small Finance Bank |
4.25% - 8.50% |
*The interest rates mentioned here are valid as of July 07, 2022, and they may be subject to change at the bank's discretion.
The table mentions the fixed deposit interest rates offered by different NBFCs to senior citizen investors:
NBFCs |
Interest Rate for Senior Citizens (p.a.) |
Bajaj Finance |
7.35% - 8.60% |
PNB Housing Finance |
7.09% - 8.15% |
Mahindra Finance |
7.30% - 8.30% |
Sundaram Finance |
7.95% - 8.25% |
LIC Housing Finance |
7.25% - 7.75% |
*The interest rates mentioned here are valid as of July 07, 2023, and they are subject to change at the NBFC’s discretion.
Now that you are well versed in the history of fixed deposit rates in India, you would be wondering whom to trust and where to invest. Bajaj Markets is an exclusive online platform for all your financial needs.
You can easily open an FD account with any one of our partners and earn interest on a monthly, quarterly, half-yearly, or annual basis.
Monthly Interest on FD
FAQs on the History of Fixed Deposit Rates
During the previous financial year, i.e., 2022-23, the average fixed deposit rates remained between 5.35%-5.90% p.a. (based on data available as of August 2022).
The FD rates in India reached their peak in 1995-96 when the maximum rates offered by banks went up to 13% p.a.
RBI’s monetary policies, along with inflation, significantly impact the prevailing fixed deposit interest rates in India.
The Bajaj Finance Limited currently offers fixed deposits with interest rates ranging between 7.11% p.a. - 8.35% p.a. Senior citizens also get an additional 0.25% over the existing rates.
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