*The article is updated on 7th July 2020
Fixed deposits are one most popular investment options in India due to its low-risk and guaranteed returns features.
With tenure ranging from 7 days to 10 years, fixed deposits are the best option to keep your idle cash. The interest rates offered are also way higher than your savings bank deposits, which offer a meagre 2-3% on deposits.
Nowadays, apart from scheduled commercial banks, you can open an FD account in small finance bank, housing finance company and NBFCs and earn higher interest rates.
So, let’s look at the best-fixed deposit interest rates offered by banks and different financial institutions.
Best Fixed Deposit Interest Rates – July 2020
Scheduled Commercial Banks
The below table combines the FD rates offered by both public sector and private sector banks. The fixed deposits issued by banks are considered the safest and offers many benefits to investors.
|Bank Name||1 year||2 year||3 year||5 year||Additional Interest Rate for Senior Citizens|
|IDFC First Bank||7.25||7.25||7.25||7.25||0.5|
|ICICI Bank||5.15||5.35||5.50||5.50||0.5- 0.8|
|Bank of India||5.5||5.4||5.4||5.4||0.5- 0.75|
|State Bank of India||5.1||5.1||5.3||5.4||0.3- 0.8|
|Bank of Baroda||5.1||5.1||5.3||5.3||0.5- 1|
Housing Finance Company
Housing finance companies (HFC) also issues fixed deposits to the public at an attractive rate. They offer both cumulative and non-cumulative FD options. The FD tenure ranges from 12 – 120 months.
|Housing Finance Companies||1 year||2 year||3 year||5 year||Additional Interest Rate for Senior Citizens|
|PNB Housing Finance||7.2||7.3||7.6||7.75||0.25|
|LIC Housing Finance||7||7||7.1||7.1||0.25|
|ICICI Home Finance ||6.5||6.75||6.8||6.85||0.25|
Corporate Fixed Deposits
The Corporate FDs are generally issued by NBFCs involved in the business of lending. They are also known for providing a higher interest rate on deposits.
|NBFC Name||1 year||2 year||3 year||5 year||Additional Interest Rate for Senior Citizens|
|Shriram Transport Finance Company||7.34||7.53||8||8.18||0.25|
Small Finance Banks
Small finance banks also offer the option of opening a fixed deposit account with them. They offer an attractive interest rate, higher than scheduled commercial banks.
|Small Finance Banks||1 year||2 year||3 year||5 year||Additional Interest Rate for Senior Citizens|
|Utkarsh Small Finance Bank||7.75||8||7.75||7.75||0.5|
|Suryoday Small Finance Bank Limited||7.25||7.5||7.75||9||0.25-0.5|
|AU Small Finance Bank||7.05||7.25||7||7||0.5|
When opening an FD account, use FD calculator to calculate returns and decide on the tenure of your fixed deposits. Also, you should note, while opening a new FD account with NBFCs, small finance banks or HFCs, check the credit rating of the instruments. Those rated negative or have low rating should be avoided, even if FD rates offered are higher.
Also, read how to safeguard your deposits in banks.